20800 - World Bank Documents and Reports

20800Volume 1

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INTERNATIONAL FINANCE CORPORATION

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1999 FinanciaL HighLightsOPERATIONAL RESULTSNew projects approved 255TotaL financing approved, $5.3 bilLion

including syndications and underwritingFinancing approved for IFC's own account $3.5 billion

Total financing committed, $3.6 billion

including syndications and underwritingFinancing committed for IFC's own account $2.8 billion

Disbursed loan and equity portfolio $10.0 billionfor IFC's own account on June 30

Total project costs of commitments $13.3 billion

RESOURCES AND INCOMENet income $249 milLion

Paid-in capital $2.3 billion

Retained earnings $3.0 billionBorrowings for the fiscal year $4.3 billion

Corporate Information ContentsSince its founding in 1956, IFC has committed The Year in Review 2

more than $26.7 bilLion of its own funds and has Letter to the Board of Governors 3

arranged $17.9 billion in syndications and under- Message from the Executive Vice President 4

writing for 2,264 companies in 135 developing Development Themes 8

countries. IFC coordinates its activities with IFC Products and Services 20

the other institutions in the World Bank Group- 1999 Regional Reports 22

the International Bank for Reconstruction and Report on Operations 54

Development, the International Development Management and Organization 61

Association, and the Multilateral Investment Financial Review 65

Guarantee Agency-but is legally and financially Portfolio Review 69

independent. Its 174 member countries provide Project Approvals 72

its share capital and collectively determine Technical Assistance &

its policies. Advisory Projects 94Appendixes 105Acronyms, Notes, and Definitions 120

Note: The management discussion and analysis, the auditedfinancial statements, and IFC's 1999 investment portfolioappear under separate cover.

Currency is given in U.S. dollars throughout un[essotherwise specified.

InternationaL Finance Corporation

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Our MissionTo pronote przivate seclor- u'icstpnzen in developing counitri.es,

which will r-educe povery and improve people's lives.

The Year in ReviewNEW INVESTMENT IN FY99 DISBURSED AND OUTSTANDING PORTFOLIO

(b I 0- f J U..no d r[[-

. . .. 2.0

2.5

Syndicated toans Loans Equity and quasi- * 77 % Loansand underwriting equity investments f 23% Equity

| APPROVED EX COMMITTED * DISBURSED TOTAL: $10.0 billion

SECTORAL DISTRIBUTION OF FY99 COMMITMENTS SECTORAL DISTRIBUTION OF FY99 APPROVALS

0n tiCr5f Ul S.d 1io iir vi. i-ros i U<S. dnllrs,

$ 1,165.90 FinanciaL Services S$1,946.91 Financial Servicesm $ 512.94 Oil, Gas, and Mining >-i $ 809.62 Infrastructurefil $ 504.27 Infrastructure Ml S 789.93 Oil, Gas, and Mininga $ 271.88 Cement and Construction Materials m $ 385.69 Chemicals and PetrochemicaLs: S 207.09 Manufacturing rx $ 296.90 Cement and Construction MateriaLs

S 179.96 Food and Agribusiness $ 271.54 Food and Agribusinessa S 173.04 Timber, PuLp, and Paper * $ 219.94 Manufacturinga $ 142.07 TextiLes Ex $ 144.22 HoteLs and Tourisms S 117.37 Industriat and Consumer Services a $ 128.56 Timber, Pulp, and Papersi $ 323.60 Other Es $ 286.73 Other

TOTAL: $3,598 TOTAL: $5,280

FROM THE BOARD OF DIRECTORS

August 1, 1999To the Board of Governors:

The Board of Directors of the International Finance Corporation has had this annual report for

the fiscal year ended June 30, 1999, prepared in accordance with the Corporation's bylaws.

James D. WoLfensohn, president of IFC and chairman of the Board of Directors, has submitted

this report with the accompanying audited financial statements to the Board of Governors.

On January 1, 1999, Mr. Peter Woicke became Executive Vice President of IFC, succeeding

Mr. Jannik Lindbaek, who returned to Norway to pursue other interests after five years of distin-

guished service. Before joining IFC, Mr. Woicke had held numerous positions with J.P. Morgan,

most recently serving as chairman of J.P. Morgan Securities Asia.

The Directors are pleased to report that in fiscal 1999 IFC continued to expand project

financing operations and advisory activities in its developing member countries, while further

strengthening its financial position.

Khalid M. AL-Saad Mohamed KameL Amr .

Khalid H. ALyahya KhaLed Al-AboodiRuth Bachmayer Luc HubLoueAndrei Bugrov Eugene Miagkov .

Federico Ferrer (vacant)Godfrey Gaoseb Girmai AbrahamUVaLeriano F. Garcia Ivan RiveraInaamut Haque Mohamed Dhif IFCs Board of Directors, December 1998.

Jannes HutagaLung Wan AbduL Aziz Wan AbduLLahYoung-Hoi Lee Lewis D. HoLdenMatthias Meyer Jerzy HyLewskiJean-CLaude Mitteron Jean PesmeSatoru Miyamura Akira KamitomaiILkka Niemi Anna M. BrandtTerrie O'Leary ALan David SLusherFranco Passacantando HeLena CordeiroStephen Pickford MyLes WicksteadJan Piercy Michael MarekMurilo PortugaL Patricio RubianesHelmut Schaffer Eckhardt BiskupSurendra Singh Syed AhmedPieter Stek Tamara SoLyanykBassary Toure Pauto F. GomesZhu Xian Zou Jiayi

As ofJune 30, 1999

Message from the Executive Vice President

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4 President James D. W"olfensohn and iEecujtive Vice President Peter Woicke

'I'his is mvy first message to you since my appointment by lim Wolfenisolhn as executive vice president

of IFC and managing director of the World Bank in Jantiary of this year. Iv. decision to accept this postreflects my deep commitmeint to the missioni of the W,Vorld Bank Group: the redtictioll of poverty in the

developing world.

More thani 3 billion people in the w,vorld live on less than two dollars a day. Almost 1.4 billion peoplelack access to clean water, and 3 billion do not have access to hasic sanitation. 'lThis year far too manychildren ulider fivc will die of preventable disease, and of those who live past that age, far too maniy willwork instead of going to school. 'I'he financial crisis in Asia and elsewhere has intensified tlhese problemiis

and forced more people into poverty.

While it may not be a dramatic revelation to say the world has come to acknowledge the relevance

of the private sector to economic development, the extent of this transformiiation is striking nevertheless.It is now widely understood that private sector flows to developing countries far exceed those fiom publicsources. It is also clear, however, that the vast majority of these flows are concentrated in a relatively fewcountries. A key role of the World Bank Group is to help the remainiing countries attract and benefit

from foreign direct investment.

Business, from microenterprise to large multinational, the year brought were formidable, and as one might

is the unquestioned engine of growth in the developing expect, the crisis adversely affected many companies

world, providing a way out of poverty for many. But the within our portfolio. Despite substantially increasing our

shock waves from the financial crisis in Asia and elsewhere loan provisioning as a hedge against possible losses and

inflicted considerable damage to the private sector. These absorbing a first-quarter loss-our first ever-we ended

financial upheavals forced many companies out of business the year by posting positive net income of $249 million.

and caused large-scale lavoffs at others, with predictable This achievement was remarkable given where we were at

and well-documented social consequences. the start of the year. Although the turnaround in the

Indeed, the momentum of economic globalization emerging equity markets in recent months helped signifi-

makes it vital that international financial institutions and cantly, much credit belongs to those here who worked

governments protect the public interest while better with clients and other creditors to come up with positive

reflecting the emergence of the private sector. The rule solutions-solutions that sought to preserve the business

of law, sensible tax codes, environmental regulations, viability of our clients in these uneasy times. IFC's ability

provision of basic education and decent health care, and to meet these challenges also validates the decision of my

encouragement of democratization are among the key predecessor, Jannik Lindbaek, to manage our portfolio

public sector responsibilities. Success in the exercise of more actively, an approach that we will continue.

these responsibilities, along with transparency, good Asia provides a case study of IFC's ability to respond

governance, and a stable macroeconomic environment, are to changed circumstances and demonstrates our counter-

necessary to a flourishing and sustainable private sector. cyclical role of aiding the private sector in times of

To ensure the latter, countries must continue to reform uncertainty. In the Republic of Korea IFC resumed an

their economies: unfortunately, completing half the active investment program for the first time in more than

reforms does not yield half the results. Progress in macro- a decade. Since the onset of the crisis we have invested in

economic reform needs to be accelerated and sustained. 17 projects in that country valued at $2.5 billion. Many of

In January of this year Jim \Nolfensohn announced a these investments were strategically targeted at the finan- 5

new organizational tool, a new means of approaching the cial sector-equity investments in banks, trade finance

development process, the Comprehensive Development facilities, an asset management fund, and a brokerage

Framework. The CDF reinforces the interdependence of house-to help reinvigorate the economy. Many of these

all elements of development-social, structural, human, investments that look good now were very risky at the

governance, economic, and financial. For success, coun- time. Often the first investor, IFC acted as an important

tries must be deeply committed and achieve common catalyst for private capital. IFC has been engaged in

goals in partnership with others. Some of the highlights restructuring efforts in Indonesia, Korea, the Philippines,

from this past year illustrate how IFC contributes to that and Thailand. And in what will be our largest investment

vital partnership. to date, we are working with Chase Capital Partners in the

Asia Opportunity Fund to help recapitalize and restruc-

A ChalLenging but SuccessfuL Year ture companies hit by the crisis.

Fiscal 1999 was not an easy year in which to realize WVorldwide, IFC is maintaining its focus on strength-

success, so any review must first pay tribute to the staff ening domestic financial sectors. Well over one-third of all

of IFC for their dedication in pursuit of service to new investments are in commercial banks, microfinance

our clients. Notable achievements ranged across many institutions, leasing companies, pension funds, stock

regions, sectors, and types of transactions. The challenges exchanges, and the like. These investments reflect the

importance we place on solid domestic capacity as poor population. In WAest Africa IFC has extended guar-

the foundation of successful private sector development. antees to several local banks to finance investments in

Through supporting financial institutions and develop- educational facilities, thus complementing governmental

ment of that sector, IFC is also best able to reach small capacity in the sector.

and medium businesses and microentrepreneurs. A You will find throughout this report additional exam-

strong conviction-reinforced by my visits this year to ples of the innovation and expanded role that characterize

Sub-Saharan Africa, Central America, and elsewhere- IFC as we enter the next millennium. While our mandate

is that the availability of credit to smaller borrowers is remains straightforward-to promote private sector devel-

a prerequisite to generating broad-based economic opment-our approach to fulfilling this mandate today is

opportunity in the poorest countries. far more diverse than even a few years ago. How are we

Brazil and Argentina, as the two single-largest country preparing ourselves to face the challenges and seize the

exposures for IFC, felt the crisis contagion but have since opportunities that lie ahead?

shown some recovery. IFC continued to bring private

investment to regions and sectors left wanting even in the

boom years of private capital flows. In Bolivia, one of the The many changes that we at IFC have undertaken over

CDF pilot countries, we are working in unprecedented the past two years to respond more effectively to our

cooperation with the World Bank and other members of clients' needs include:a)

the development community. We opened an office in La instituting a credit risk and review function to streamline

. Paz and invested in the water, power, and energy sectors asOY ~~~our investment processing and enhance quality control

., well as in a microfinance institution.. *establishing a dedicated capacity within our Syndications

The opportunity to seek closer operational and policycollaboration with the World Bank was one of the reasons Group to provide high-quality service to our commercial

that the IFC post appealed to me. The Azito power project, bank partners

a 288 MW facility in Abidjan, Cote d'lvoire, provides one revising our budget and strategic planning process to

example of this potential. It wvas successfully financed by enable us to act quickly and flexibly to the changing

combining IFC's syndicated B-loan program with a partial needs of our developing country clients.

risk guarantee from the International Development A new approach to human resources at IFC includes effortsAssociation of the WAorld Bank. WVe intend to lead more of

to recognize and reward staff performance and to providethese types of transactions in the coming year as part of a

the necessary tools for staff to do their jobs. Tlhis approachconcerted effort to utilize the full range of financial tools i

will also focus on:available through the Bank Group.

Other new areas of focus and lines of business for leadership development through better performance

IFC are the health and education sectors. While clearly appraisal in our human resources action plan

the public sector must continue to carry the primary succession planning to identify and foster a new genera-

responsibility for these critical social services in devel- tion of leaders

oping countries, as elsewhere in the world, we continue tofind opportunities. In South Africa I saw the fruits ot an better career management and job growth opportunities

. .. ~to attract and retain the best performers.IFC investment in a comprehensive health care facility in

a township outside Cape Town, which will provide I regard these and other human resource initiatives as a

reasonably priced quality care to a badly underserved and singularly important priority.

Another approach to performance enhancement is enterprises represent the majority of economic activity

through strengthened environmental and social policies in our member countries, we intend to do more to support

and procedures put in place last year. We hold that IFC their development. We will bring to bear the knowledge

should promote environmentally and socially responsible and experience now dispersed throughout the Bank Group

private sector development not just because it is the right to offer policy advice for SME start-ups and growth and

thing to do but also because, as increasing numbers of our to encourage private intermediaries to make the needed

investee companies are finding, these high standards are financing available.

good for business.

We have also improved our accountability for sound In Closingperformance. with the addition of a compliance adviser/ Early in my IFC career, I reached an unshakable conclusion:

ombudsman-Ms. Meg Taylor of Papua New Guinea- Our institution and its people constitute an invaluable

who reports directly to Jim Wolfensohn on policy com- resource for developing the private sector in ways that will

pliance and responds to outside parties concerned about generate poverty-reducing economic growth. No one else

possible adverse effects of IFC projects. These steps can play the catalytic role we are uniquely equipped to

increase our confidence that our own projects as well play in a world that needs us more than ever. As we

as many outside our direct involvement are done approach the 21st century, we at IFC do so with a clear

responsibly or not at all. sense of mission and the resolve to grow into the larger

role we must inevitably play in loosening the grip of

Concerted Efforts poverty and improving the quality of life for those in the

With our diverse human and financial resources, we of the countries in which we work.

World Bank Group collectively face the task of reducing

poverty with renewed vigor and resolve. And while our

institutions continue to reshape as the world changes and

we learn new lessons, it is my conviction, widely shared,

that the sum of the Bank Group's components devoted to

private sector development is not as great as it can be. Over

the next year you will see us make organizational changes

to clarify roles and responsibilities. New cross-organiza-

tional structures will allow IFC's transactional experience 6• 4% 4to be better integrated into the important policy advice

that the Bank provides to governments, while taking special PETER WOICKE, EXECUTIVE VICE PRESIDENT

care to ensure that any potential conflicts of interest are

effectively managed. We will also unify our broad array of

advisory services to governments so that we speak with

one voice to our clients.

We are also engaged in active partnerships with

multilateral, bilateral, and other international financial

institutions to better leverage all our strengths to promote

private sector development and strengthen civil society

in developing countries. And since small and medium

) IE

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__ !Catalyzing InvestmentX8) Whatever the need-mass transit in Bangkok or a power plant in Africa-

IFC can help by providing its own funds alongside those of its partner

investors. In todays volatile financing environment, with an acute shortage

ofprivate capital in developing countries, lFCs participation is often

the catalyst for projects that make a big dlifference in peoples everyday lives.

PETER RARER PA POWER

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GLiding across Town devise a unique financing package based primarily on

bangkok is a traffic nightmare, quite possibly the world's local currency debt. Since all project revenues are paid in

worst. Vehicles move at a perpetual crawl, wasting time baht, this structure provides important protection should

and causing enormous productivity losses to the local exchange rates fall as they did in July 1997. W8Then this quiet,

economy. With no light rail system in place, the metro environmentally sound overhead system opens, it should

arca's 10 million residcnts can cither walk or take their spell a big improvement for its anticipated 650,000 daily

chances in traffic. It's frustrating and the chronic exposure users in one of Asia's biggest cities.

to exhaust fumes poses serious health hazards.

More Power to Cbte d'IvoirePrivate infrastructure projects have brought many benefits

to people in Asia and other regions in recent years. But

despite great need, they have barely reached Africa-until

___ w R lnow. This year IFC disbursed funds to Sub-Saharan Africa's

first independent power project to obtain nonrecourse

S | 15|3 5 iR 5 X commiiercial financiing. The 288 MW Azito power plant

in Cote d'Ivoire is clearly tied to the Ivorian economy, as

W't _Eelectricity revenues are received in the local currency. The

~m aresr driv_. $ key to attracting $60 million in long-term loans from a

B nasgkoks Sky Train o1 a test drie. syndicate of seven banks was allaying risk perceptions by

blending a World Bank partial risk guarantee with IFC A-

For decades the public sector failed to address the and B-loans, enabling Azito to move from bid award to

problem, even as traffic volumes swelled by 35 percent initial commissioning in only 18 months. As a result, the

a year. But at last a breakthrough is near: the Bangkok Ivorian people have averted projected shortages with this

Mass Transit System SkvTrain, among the world's largest reliable new source of electricity fueled by their country's

privately financed mass transit projects, is scheduled to own offshore gas reserves.

open in December 1999. The challenge for the future: building on this

IFC played an important role in this locally spon- momentum to expand the proven benefits of private

sored, $1.2 billion elevated rail system that will cut travel infrastructure to more countries and sectors around

times along its 23.5 km downtown route by as much the world.

as two-thirds. -We approved $100 million and also helped

for Africa, the $500 milion AIG African Infrastructure Fund. for coinvestment in selected transactions. Although the pace

African governments are looking to the private sector to meet of private infrastructure development in Africa has been sLowthe growing demand for improved services, and yet commer- to date, we estimate that $17 bilLion in private infrastructurecial financing for these undertakings is scarce. AIG, committed will be needed over the next five years to provide basicto investing in environmentally sound projects, expects the services: this is a start.

fund to support $2.5 billion of new infrastructure. IFC agreed

to invest $75 milLion in the fund and set aside $25 million

Advicelo <5Sometimes what clients need most is not investment: its advice.

IFC can provide advice on structuring an especially complex transaction

in a difficult brasiness environment and do it with frirness, transparency,

and sensitivity to local issues.

COURTESY OF ANTOINE COURCELLE-LABROUSSE

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The Power of Ideas intermediary that could address the problem. The team

Everywhere the world over, when there's a formidable arranged for Canada's largest housing finance firm to

financial barrier to cross, advisers are all-important. By send two long-term advisers to help set up the Palestinian

doing thorough groundwork, good advisers attract good Mortgage and Housing

investors and lay complicated problems to rest. Corporation (PMHC).

IFC's clients sometimes need advice to find financing In addition, IFC

to expand existing operations. In other cases, they have a brought in more than

promising idea and need partners to create an entirely new v }t 15 consultants to

entity that bridges the gaps in a local business landscape. 1'3 address the banking,

The advisory work IFC takes on is risky, but it can lip' legal, insurance, deed

directly benefit individuals. When, for instance, our advice I registry, land, and

strengthens domestic financial institutions, we help them X capital markets aspects

meet the pressing needs of local communities. of the project.

Microfinance is one of the most effective tools - PMHC's mixed

in fighting poverty; yet resource constraints sometimes Much-needed new housing public-private

prevent providers from meeting the huge potential t Pales anso lack of access ownership structure

demand for their services. Mali is an example where to mortgage financing. includes leading busi-

microfinance currently reaches only a fraction of the ness group PADICO,

economically active population. To foster its growth, Arab Bank Group of Jordan, the Palestinian ministries of

IFC has advised local microfinance groups on ways to finance and housing, the Palestinian Monetary Authority,

raise their accounting and internal auditing to the level and German development bank DEG.

expected by the country's best banks (see below). This new institution will enable primary lenders to

provide mortgages with longer maturities and smaller

Making Dreams Come True down payments by offering default insurance and 1

How can a distressed economy provide the mortgage liquidity facilities. In the coming years, this should

financing that middle- and working-class people need enable thousands of Palestinians to move out of cramped

to achieve their dream of home ownership? Palestinian apartments and into something they have always wanted:

authorities in the West Bank and Gaza asked IFC to their own homes.

take on this challenge in 1996.

Working closely with the World Bank, IFC accessed

Canadian trust funds to bring in housing law experts.

They worked with Palestinian counterparts to devise an

less and electricity, running water, and telephones are medium-term loan so that it can lend to more of Dogon's

virtually unknown. Its Loans, often the only ones local self-employed poor.

farmers can get, sometimes generate enough extra incometo enabLe them to send their children to school. Now that

CVECA's books are in order, thanks to IFC assistance,it can start borrowing from commerciaL banks. Backed by an

IFC partial-credit guarantee, CVECA will receive its first

__ ~Crisis Response12 Weemrecedirupt private businesses in a country-even

entire sectors-IFC responds wi'th skill and flexibility. There is no

clearer example of our commiitment to economi es i.n cri.si.s than our

recent efforts to aid the troubled economies ofAsi'a.

ROB WRIGHT, IFC

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Social Impact Making It HappenSince the outbreak of the financial crisis that began with Working alongside Chase Capital Partners and private

the collapse of the Thai baht in 1997, many people in East investors from Hong Kong, IFC is supporting the Asia

Asia have lost their jobs and struggled to survive. The social Opportunity Fund, an investment vehicle of up to

impact has been severe-most of all in Indonesia, where $750 million to recapitalize large, troubled companies in

a shrinking GDP, high inflation, and capital flight are Indonesia, Korea, Thailand, and elsewhere. The fund-

estimated to have increased joblessness by a factor of IFC's largest investment in history- will inject the equity

five, sending millions of people back into poverty. In the and management

Republic of Korea and in Tlhailand unemployment has _ expertise needed to

quadrupled. Underemployment-considered by many make successful

a better indicator of declining welfare in developing turnarounds happen.

countries-has spread throughout the region. In addition to this

pooled approach, IFC

Putting People Back to Work has done considerable

It will take Asia's companies to put Asia's people back work with individual

to work, but major obstacles stand in their way. The crisis-affected com-

companies must take difficult steps to resolve their debt panies. In Indonesia,

problems and raise new equity. Thev must regain access IFC completed one

to trade finance. And to strengthen their foundation of the first corporate

for the future, they need to adopt sounder models Lonely cement mixer on aban- restructurings sincedoonedt construTction site in .................of corporate governance than were used in the past. Thai/and awaits return of capital the advent of the crisis,

Unfortunately, the success stories to date have been helping Jakarta's Hotel

far too infrequent. Santika improve its ability to service its debts. IFC also

The headlines noting disaster are fewer now, but great advised a large Thai company, Siam City Cement, on its 13

needs remain. For that reason we have worked hard with restructuring and invested in reviving smaller enterprises

our partners on precedent-setting transactions and have in Korea and the Philippines.

responded with the flexibility demanded by the times. When financial crises strike, they must be confronted

boldly. Our work in Asia this past year took aim at

correcting underlying problems and making companies

more resilient. Our hope is that employers will be better

able to withstand future economic challenges.

with two Dutch institutions to create a $140 million finance aLso includes recent initiatives for the Republic of

trade finance and working capital faciLity. It supports Korea with Bank of America, Sumitomo Bank, and WestLB.

individual transactions with maximum maturities of only All have gained wide acceptance in the marketplace.

210 days, creating a new modeL for the international

financial community and helping spark additional tending

by allowing international banks to leverage their credit

exposure to Indonesian companies. IFC's approach to trade

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A Ready Ear, Willing to Listen As CAO she will fill an informal advisory role as well

IFC innovates in a number of areas-including addressing as review complaints from those who claim that IFC or

environrnental and social challenges. For a number of MIGA has not complied with its environmental, social, or

years, many have held that a publicly funded institution disclosure policies. Ms. Taylor will make recommenda-

like IFC should be more accountable to local people tions and report directly to Mr. Wolfensohn. One of her

affected by its projects. After extensive dialogue with key functions is to help identify positive outcomes for

business and nongovernmental organizations, a creative both the project sponsor and the affected community.

approach emerged: a pragmatic, solution-driven mecha-

nism grounded in IFC's unique role in the private sector. Leasing on the Rise in RussiaA new vice presidential-level position was created in IFC Since last year's collapse of the Russian banking sector,

and the Multilateral Investment Guarantee Agency, that leasing is one of the few remaining viable ways for small

of Compliance Adviser/Ombudsman. World Bank Group and medium enterprises to obtain needed equipment.

President James D. Wolfensohn selected Meg Taylor for Demand for leasing in the Russian Federation, estimated at

the CAO position, the $1.5 billion this year, has grown in part through IFC efforts.

first of its kind in a IFC has promoted leasing in many parts of the

multilateral institution. developing world, but the unique challenges found in the

Ms. Taylor, a Russian Federation have required versatility, agility, and

Harvard-trained persistence from the team working through the Leasing

lawyer from Papua Development Group in Moscow. The LDG tcam has

New Guinea, assumed convinced Russian authorities to remove barriers to leasing

The . -- 1l ......- the position in July. through revised tax, accounting, customs, and currencyShe has a keen sense regulations and to set industry standards through the 1998

The new CAO, Meg Taylor. of the interplay of Leasing Law. IFC established LDG in 1997 with backing

local, national, and from the U.K. Know How Fund and the Canadian 1

international issues in development and an openness to all International Development Agency.

perspectives. She has served on the board of several compa- LDG has hired Russian accountants and lawyers

nies and environmental groups and is passionate about to discuss leasing issues not only with the Duma and

protecting Papua New Guinea's national treasures. In fact, national regulators but also with officials in the oblasts,

she cofounded the community-based organization where local ordinances can often clear away remaining

Conservation Melanesia. Ms. Taylor was Papua New obstacles. This resourceful and energetic strategy has paid

Guinea's ambassador to Washington from t989 to 1994. off. In FY99, IFC expressed its confidence in the improved

climate by agreeing to invest $3 million in a new joint

venture equipment leasing company.

assist the recovery but has found few private banks or that privatization occur within a reasonabLe period of time.

companies with which to do business. To meet the urgent Before committing funds in Bosnia and Herzegovina, we have

needs, we have modified our usual private-sector-onLy advised locat managers on marketing, accounting, and

approach to work with strong companies and banks still in production processes, often using bilateraL donor funds.

state hands. The objective is to help these clients become

more attractive to future private investors. When we invest

in public sector entities, we do so onLy on the condition

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h gKnowLedge

__~ ~ Sharing

16 Too little knowledge is a dangerous thing, especially now when knowledge

Is often, as crittical a factor ofproduction as land, labor, and capital. JFC

increasingly acts as an intellectutal catalyst as well as a financial one,

offering its own knowledge in keyfields to those who need it. We make it

our business to seek out ideas that work and pass them along.

MONICA H~ALE, IFC

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Training Boardroom Environmentalists Corporate Governance'When considering investing in private companies in the IFC has acquired substantial experience with privatization,

developing world, banks must weigh not only financial which can be a great asset to a developing economy if

risks but also social and environmental ones. IFC has properly handled.

built up a large and unique body of knowledge on this IFC has advised more than 100 large Ukrainian

subject in recent years. When IFC invests in a financial enterprises that have been sold through mass privatization.

institution or provides it a credit line, that institution is These companies now hold open annual meetings where

required either to have environmental and social due- shareholder rights are respected and where management

diligence practices in place or to send appropriate staff to and boards of directors are held accountable for their

IFC's workshop. Already, more than 300 of IFC's financial performance. Now more than 1,500 privatized firms better

partners have been shown that it is good business to understand issues such as the importance of sound financial

assess up front their borrowers' potential impact on the management, independent audits, and respect for outside

planet and its people, lest costly problems arise later. investors-issues essential to joint stock corporations

"More and more I believe that companies that care everywhere. The knowledge is being shared through the

for the environment and can handle social challenges will Ukraine Corporate Governance Project, which IFC has

outperform those that do not," said German Cammarata sponsored with approximately $1 million in donor

of Argentina's Banco General de Negocios. That was the i support from the

overriding thought he took away from "Competitive A * United Kingdom and

Environmental Advantage: Managing Environmental Risk V Canada since 1997.

in Emerging Markets," a week-long training course IFC A similar program is

developed with support from Japan. The way his bank f now in place in

does business is changing as a result of insights gained in Armenia as well,

the course, Cammarata said. with support from

Offered both in Washington and overseas, the class the Netherlands. 7

always draws a full crowd of lenders and equity investors CEO Luhomyr Bohdan (right) tookthe helm of Conveyor. a Ukrainian

who learn how to become what Cammarata calls "board- manufacturer of conveyor systems, in

room environmentalists"-and market leaders as well. hopes of turning the company around.One of his first steps was to seek IFCadvice on corporate governance.

a book published by IFC in September 1998. The second developing countries with privatization, investment

work we produced this fiscal year, Project Finance in funds, Leasing, private infrastructure financing, and foreign

Oeveloping Countries, describes major internationaL trends in direct investment.

project finance, significant risks in project structuring, and Copies can be obtained by catling 1-800-645-7247 in

key ingredients of successful project financing. These are the the United States or by e-maiL at [email protected].

sixth and seventh voLumes in our "Lessons of Experience"

series. Previous voLumes reviewed IFC's experience in

__ Management Training18 The biggest constraint on private sector development may not be lack

of capital but lack of managerial skills. Without the kinds of schools,

apprenticeships, and training institutions that help generate good local

managers, developing countries cannot build enough businesses or create

enough jobs to make headway in the fight against poverty.

_l~~~~~~~~~~~~ * .6 I * *' S S s N _

_~~~~~S I * I . .5 - I . I - I V i

_ _ 3 E - 3 ~~~~~~~I I. S 3 11.

_ | _E E s . . . . . ._

AtMSCO to the complex local business and legal context. The

The management gap is especially acute in Africa. But courses fill an important knowledge gap. introducing

help comes from the African Management Services Co. local small business owners to standard international

(AMSCO), a public-private partnership IFC cosponsors practices in four key areas: human resource management,

in cooperation with both multilateral and bilateral finan- finance and accounting, marketing, and operations and

cial institutions and 53 private companies. Its mission production methods. More than 150 entrepreneurs paid

is to provide the management personnel and training the course fee out of their own pockets when the classes

that African companies need in order to become-and were first offered in the fall of 1998. Subsequent demand

remain-internationally competitive. has been so high that the courses will be taught more

AMSCO helps companies like Ecobank Transnational frequently in the coming year and introduced in the Lao

Inc. (ETI), Africa's first locally owned regional bank holding People's Democratic Republic and Cambodia.

company. Having just completed a $28 million capital

increase with support from IFC and other investors, ETI E

offers a full array of commercial and investment banking a

services throughout West Africa, and at a higher level of 2

service than usually found there. In a search for skilled .

local managers, ETI approached AMSCO and received

a $250,000 training grant. ETI matched that on a three-

to-one basis from its own funds to arrange sophisticated

training from Citibank and other institutions. Credit -.

analysis and treasury operations were just two of the -

topics presented to ETI staff. As a result, the people of

West Africa enjoy better banking services.

MPDFTraining resources are in equallv short supply in the MI I ~~~~~~~~MPDF helps small entrepreneurs like thisceramics manufactureremerging private sector of Vietnam. There, another IFC- on the outskirts of Ho Chi Minh City, Vietnam.

sponsored multidonor initiative, the Mekong Project

Development Facility, has put together the first manage-

ment training courses taught in Vietnamese and customized

2,000 SME entrepreneurs. The centers have aLso provided internationaL standards. They then Learned to teach

1,300 business consultations that facititated $6.5 million this material, in the hope they wouLd pass the skill

in investments. IFC conducted other training nationwide Dn to local entrepreneurs.

in 1999. We sponsored five-day courses in aLL the major

cities for employees of business support centers, LocaL

companies, and business consuttancies. Participants

Learned to deveLop business pLans in accordance with

IFC Products and ServicesAT A GLANCE

Equity and Quasi-EquityIFC puts its own capital at risk by buying shares in project

companies, financial institutions, or other project entities.

These equity infusions provide enterprises in the devel-

oping world with long-term capital that does not impose

a fixed debt service schedule. Quasi-equity includes

subordinated loans and convertible debt instruments,

l *| l which impose a fixed debt schedule, and preferred stock

* a .. a a a a a and income notes, which do not impose such a schedule.

IFC may take a maximum 35 percent stake in a

venture but generally subscribes to between 5 and 15

percent of a project's equity. IFC policy is that it not be

the single largest shareholder in a project.

Equity categories are:

s -00000 'I'8 0 f;| ilS 1 il31 1= * direct investment for the Corporation's own account in

companies in the industrial, agricultural, infrastructure,

or service sectors

*investment in financial intermediaries and financialmarkets institutions:0

* investments in portfolio or private equity funds.

IFC typically holds equity for 8 to 15 years. The

20 preferred exit mechanism is public listing under circum-

stances advantageous to the enterprise.

Loans and Intermediary ServicesIFC also makes long-term loans on a project finance or a

corporate finance basis. These are called A-loans, meaning

IFC writes them for its own account.

Most IFC loans are issued in major currencies, but

IFC offers a number of local currency loans. Maturities

range between 7 and 12 years at origination but have been

extended for as long as 20 vears. Grace periods can be as

long as 4 years, depending on project needs.

Through project finance, project sponsors can launch

new ventures while limiting risk exposure to their existing

- , @ * **. - operations. IFC project finance is generally extended on

either a nonrecourse or a limited recourse basis.

31 _ @

Because project financing requires a thorough under- Advice, Technical Assistance, andstanding of a project's intrinsic elements, IFC carries out Information Servicescomprehensive due diligence before investing. IFC provides advisory services and information to private

A major form of IFC lending is also through credit companies and governments with regard to private sector

lines for on-lending by intermediary banks, leasing compa- issues. Offerings vary widely:

nies, and other financial institutions. These credit lines are The Emerging Markets Data Base sells statistics

often targeted at specific sectors or small businesses. and indexes on developing-country stock markets'

performance (p. 57).

Mobilization and Risk Management The Technical Assistance Trust Funds Program

Often, IFC involvement in a project is seen as a seal of offers a broad range of grants from donor countries

approval that encourages others to invest. Syndications or for consultants or studies (pp. 59-60, 94-104).

B-loans are the cornerstone of IFC's mobilization efforts. The Corporate Finance Services Department

Through this mechanism, participants share fully in the provides privatization advice that optimizes commercial

commercial credit risk of projects but also enjoy the value while being sensitive to the country's economic and

advantages that IFC derives as a multilateral development political context (pp. 28, 59, 94-104).

institution. This structure offers financial institutions the The Technical and Environment Department

opportunity to participate in loans to carefully appraised offers-in the context of a prospective IFC project-

projects in countries that they might not otherwise view high-quality advice, review, and training to ensure environ-

as attractive. mentally and socially sound investment (pp. 58, 63).

Commercial banks, institutional investors, and other Project development facilities in Africa, Asia, and

nonbank financial institutions have found B-loans a the Pacific help prepare business plans and develop

proven way of investing in developing countries, particu- management skills (pp. 25-26, 30, 34, 35, 119).

larly in new markets where they have little experience and The Foreign Investment Advisory Service provides

limited credit capacity. advice to client governments on creating an enabling 21

Underwriting, private placements, and equity funds environment for foreign investment (pp. 27, 39, 40, 52,

are important businesses for IFC. Through these mecha- 60, 62, 94-104).

nisms, IFC can help clients gain access to international The Financial Markets Advisory Department offers

capital markets, often for the first time. technical advice to governments on securities markets; on

Risk Management Services enable clients to access the legal and regulatory framework for leasing, mutual

the derivatives markets to hedge currency, interest rate, or funds, insurance, and housing finance; and on banking

commodity price exposure. These services allow clients to (pp. 62, 94-104).

contain currency mismatches on their books and enhance

long-term profitability (p. 57).

Standby financing and guarantees of loans and

bond issues help clients mobilize financing. Guarantees are

granted for both major and local currency loans and bonds.

0.0cL)

w ~~1999_Regional Reports22

4 N

\ x|~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~NEA _ _Th TFC

- ~ ~ ~ ~ ~ ~ ~ ~ -

NEERAJ JAIN. IFC 23

SUB-SAHARAN AFRICA 24

~ ASIA AND THE PACIFIC 30

CENTRAL ASIA, THE MIDDLE EAST, AND NORTH AFRICA 36

,,a!4 LATIN AMERICA AND THE CARIBBEAN 48

Sub-Saharan AfricaA FRAGILE ECONOMIC RENAISSANCE ENDURES

The economic Some African countries saw political and

recovery in Sub- economic instability spill beyond national borders,- Saharan Africa creating, in effect, regional economic crises. Clashes

faltered in 1998. between Ethiopia and Eritrea intensified; and Angola,

e _ _ After three years of the Democratic Republic of Congo, Guinea-Bissau,

growth, per capita Lesotho, and Sierra Leone all suffered outbursts of

gross domestic conflict. Even weather played a hand, with the El Nifio

4 zin5> product declined phenomenon taking its toll on agricultural harvests

for the continent throughout the region, particularly in eastern and

24 as a whole. The region did claim several bright spots, southern Africa.

however, in countries that escaped political instability Despite the obvious setbacks, most African

and commodity-price gyrations and that effectively countries furthered market-oriented economic reform.

implemented reforms. IFC focused its financing and Privatization and restructuring of state monopolies

assistance on projects in those countries in order to continued, as did promotion of private investment and

boost the private sector's ability to generate and sustain competitive export policies. Macroeconomic manage-

growth. We agreed to invest in 83 ventures, with special ment also improved.

emphasis on building financial markets, supporting

African entrepreneurs, and developing infrastructure.

Because international investors have traditionally i

been cautious about exposure in Sub-Saharan coun-

tries, most of the region managed to escape direct hits

from the financial crisis in emerging markets. South4

Africa, however, was the exception, as short-term capital

outflows threatened to destabilize an economy already

in recession.

ANGOLA CHAD ETHIOPIA LIBERIA NIGER SUDANBENIN COMOROS GABON MADAGASCAR NIGERIA SWAZILANDBOTSWANA CONGO, DEMOCRATIC THE GAMBIA MALAWI RWANDA TANZANIABURKINA FASO REPUBLIC OF THE GHANA MALI SENEGAL TOGOBURUNDI CONGO, REPUBLIC OF GUINEA MAURITANIA SEYCHELLES UGANDACAMEROON COTE D'IVOIRE GUINEA-BISSAU MAURITIUS SIERRA LEONE ZAMBIACAPE VERDE DJIBOUTI KENYA MOZAMBIQUE SOMALIA ZIMBABWECENTRAL AFRICAN EQUATORIAL GUINEA LESOTHO NAMIBIA SOUTH AFRICA

REPUBLIC ERITREA

Development Priorities SUB-SAHARAN AFRICA: PROJECT FINANCING

IFC's African strategy complements that of other parts of the (mI Uons of U S dcom,s) FY99 FY98

World Bank Group and was developed in consultation with

African governments, business leaders, donor organizations, Financing approved for IFC's account 358 386*Loans 182 298*

and African and international financial agencies. This strategy Equity and quasi-equityt 176 88

has three main priorities: Loan syndications & underwritings approved 4 292TOTAL FINANCING APPROVED 362 678*

to strengthen the financial sector through direct investment Financing committed for IFC's account 242 342

in financial institutions; provision of advisory services and Loans 164 236Equity and quasi-equity

9 78 106

technical assistance; and coordination with the World Bank Loan syndications & underwritings signed 50 217

on regulatory reform. TOTAL COMMITMENTS SIGNED 292 559

Financing disbursed for IFC's account 189 153

to support indigenous entrepreneurship through either Loans 132 110

selective direct financing or work with other financial Equity and quasi-equity9 57 43

Loan syndications & underwritings disbursed 41 173

intermediaries to reach small firms. In addition, we provide TOTAL FINANCING DISBURSED 230 326

technical assistance through our Africa Project Development Committed portfolio for IFC's account 1,047 916 25

Facility (APDF) and African Management Services Loanis 746 699Equity 301 217

Company (AMSCO). Committed portfolio held for others 283 260

(loan participations)to develop a sound physical infrastructure-long neglected TOTAL COMMITTED PORTFOLIO 1,330 1,176

under public management throughout Africa-by directly

financing, supporting, and advising private investors. 'Revised FY98 figures.Inctudes Loan and equity-type, quasi-equity investmenrts.

SUB-SAHARAN AFRICA: FINANCING, FY95-99

-l:ocs .- U.S. doasa)

"Most African countries furthered -- ...

market-oriented economic reform. 3 -. . .

Privatization, restructuring of state i ::

monopolies, and promotion of n .II il l 1.1.private investment continued."

- APPROVALS COMMIrTED DISBURSEDSyndicat-os and underwnting B Syndications and rnderwnnig * Syndications and unde-wninog *

Financing for IFCs own account l Financing for IFC's own account * Financng for IFC's own account

SUB-SAHARAN AFRICA: PROJECTS AND COUNTRIESLearning numbers at Groupe Scolaire Hamdallaye in Conakry, Guinea.

With IFC support, the private primary school will build a secondary FY99 FY98

school in a low-income neighborhood and offer high-quality education APPROVALS

in a disciplined environment. Number of projects 80 80*Number of countries 26 23

COMMITMENTSNumber of projects 46 54Number of countries 20 22

DISBURSEMENTSNumber of projects 43 51Number of countries 16 19

*Revised FY98 figure.

These priorities cut across all countries in the region.

Individual countries, howevcr, havc a continuing nccd for

2 project finance in extractive industries, agribusiness, efficient

areas of manufacturing, health care, education, and tourism.

We will support projects in those sectors when we identify

comparative advantage and substantial development impact.

IFC took a number of steps in FY99 to implement its

X s t African strategv. We integrated into our operations the Africa

< S 0 1 l l l Enterprise Fund, our vehicle for direct financing of small

2; X 0 01 | 111131 i 1!! firms, in order to help small and medium enterprises (SMEs).

V., 0 s 0 1 l 1 l ll To expedite the processing of these smaller projects, we are

upgrading field locations in Abidjan, Johannesburg, and

Nairobi to regional hubs. Enterprise Support Services for

Africa (ESSA), begun in 1996 as a pilot program in Ghana

26 to provide technical and production assistance to small

firms, expanded into southern Africa and began to spread

across the region as part of APDE.

West AfricaIn West Africa, the countries of the WVest African Economic

and Monetary Union continued to enjoy steady growth,

nearlv 5 percent for the fourth year in a row since the 1994

devaluation of the regional currency. C6te d'Ivoire, the

|Ethiopians in the alibela highlands await a bus ride to market to sell economic anchor for the region, is IFC's largest client countryfirewood they havegathered. IFCfinanced the improvements to this in Africa. Here, we continued to focus on financial sectortoll road.

projects in banks and other financial agencies. We also

h ~IS I II.

-iIEEt fD" S -. - - .I S IIIZ

1 I' I ., a i* :u .:

I l;I I i SI I. -| S i e.g- .i I i i ..

approved investments in petroleum distribution, rehabilitation our support of the country's financial sector, we approved

of a privatized rubber plantation, and SMEs. In Ghana, we several investments in banking and in more specialized

approved a number of small enterprises in manufacturing and financial services firms that aid the development of capital

services. Elsewhere in the subregion, we stepped up our role in markets. In addition, we supported a number of small firms

Mali, which has emerged as an increasingly important venue in various service sectors.

for private investment. WAe approved projects in microfinance, As reforms continue to stimulate new private sector

equipment leasing, and printing and publishing services development in Tanzania, we approved investments in

there. Senegal's continued growth attracted new IFC invest- several small tourism and agribusiness firms. FIAS evaluated

ment, as we financed projects in food processing and in the Tanzania Investment Centre, and IFC trust funds

cement. In addition, we provided advisory services for an supported analyses of telecommunications privatization,

expansion of the Dakar water system that will alleviate a as well as options for data transmission services, leasing,

critical shortage of potable water in the capital. The Foreign tourism development in Zanzibar, and regional trucking.

Investment Advisory Service (FIAS) completed analyses of

administrative barriers to investment in Mali, Mauritania,

and Senegal. In Mauritania, our support of a bank marked 27

our first investment in that country's financial sector.KENYA: STOCK SETTLEMENT

WNith civilian government once again in place in Nigeria, GE S TOCGOES ELECTRONIC

IFC is evaluating prospects for reestablishing a full investment The Nairobi Stock Exchange (NSE) is automating its

and advisory program. A resident representative was assigned settlement and clearance operations, and IFC has been

to Lagos. a key player. The exchange's imminent conversion from

paper to electronic settlement and registration wilL be

Eastern Africa carried out by Africa's first private central depository

IFC found a range of opportunities in eastern Africa. Despite company, the CentraL Depository SettlementCorporation. The system will boost market liquidity and

general economic stagnation in Kenya, a dynamic privatetrnpecyadwlecoagicesdpriiainsecto is slectiely udertaing nw invstmens. Tohelptransparency and will encourage increased participation

sector is selectively undertaking new investments. To help by LocaL and foreign investors in Kenya's capital markets.

build on Kenya's position as a regional leader and to continue Core shareholders NSE, Citibank, and Kenya Commercial

Bank wiLL join IFC in this state-of-the-art concept. IFC

drafted the business plan and enabling legislation and,as an honest broker, brought together the technical

partner and sponsors.

In addition to linking aLL market participants eLec-

tronicaLLy, the system will enable NSE, whose tradingvolume increased tenfold between 19g2 and 1g98, to

manage future growth successfuLLy. While the company

wilL initially focus on Kenya's equity and debt securities,

its services will eventually extend to the Ugandan andTanzanian markets.

Highland Flowers in Rwanda will grow rosesfor export to theEuropean market. The new six-hectare nursery is expected to employ274 more people, many of them widows.

~~4* - -

Southern Africal A l | Growth and change in southern Africa meant increased

activity for IFC in FY99. Buoyed by inflows of foreign invest-

ment and continued reforms, Mozambique's economy grew

by more than 10 percent. We approved projects in several

SMEs and in the sugar-processing industry. Construction

began on the IFC-financed, $1.3 billion Mozal aluminum

smelting plant, which x\as named "industrial deal of the

year" for 1998 by Project Finance International. IFC trust

funds supported feasibility assessments for cement, leasing,

port rehabilitation, and cashew-processing projects.

IFC is significantly expanding its program in South

Africa to support the government's nascent economic

recovery program. Despite a stagnant economy, South Africa

28 . ,* ** ... still offers opportunity, and we have enlarged our portfolio

in the country. We approved several financial sector invest-

ments and supported SMEs. We also helped previously

disadvantaged groups expand their businesses and acquire

new ones. WNe evaluated alternatives for municipal waste

disposal for the city of Durban. IFC technical assistance trust

funds were used to assess the potential for new investments

in sugar processing, prefabricated housing, paper, printing,

and equity funds.

I~~~ I U

_ | ~~~~~~~~~~~~~~~Senzegalese children nzear the Lac de Guiers, the largest water source- __ | ~~~~~~~~~~~~~servinzg the capital, Dakar. IFC advised the governzment or? a tranzsac-__ I ~~~~~~~~~~~~~~tionz to transport bulk water from this lake to the metropolitanz area.

._ - .. 6S 5SS

__ I 66

While depressed copper prices dragged down the _

economy in Zambia, the potential for a turnaround in the

minerals sector was boosted by the privatization of the

copper mining parastatal ZCCM. With projects in insurance

and cellular telephones in that country, IFC made priorityf

investments in financial markets and in infrastructure.

Across the Region

Two innovative FY99 projects will have an impact throughout

Sub-Saharan Africa. First, IFC support of the $500 million

African Infrastructure Fund is designed to provide equity

finance to infrastructure projects. Second, we concluded an

agency agreement with the French financial organization

PROPARCO to develop projects for joint financing in smaller

countries where PROPARCO has a strong field presence. 2

W\Jhile most African stock markets did not fare well

in FY99, the IFC-supported Africa Emerging Markets Fund,

a mutual fund investing in stock markets outside of

South Africa, earned recognition from Standard & Poor's

as the best-performing African investment fund over three

and five years. u Maluti Dairy Products willpri vatize and rehabilitate itsoperation. Investors in the $1 million upgrade include 45 small dairyfarmers and the firms employees. The project willprovide a securemarket outletfor 60 small-scale farmers.

GUINEA: ALEX-SOCATRAG MAINTENANCE GARAGEWith most African mining companies verticaLLy integrated and largeLy seLf-sufficient, everything from the building of roads to the housing

of empLoyees is provided from within. To reduce costs, however, one of the largest bauxite mines in the worLd, Compagnie de Bauxite de

Guinee (CBG), recentLy decided to subcontract the operation of its vehicLe and equipment maintenance garage. IFC pLayed a key roLe in

bringing this smalL but vital project to fruition.CBG employees, organized as a cooperative, enlisted the services of Alex Pneu Mecanique, a small Canadian company that operates

maintenance garages in Montreal. But Guinean banks were reLuctant to lend money to a cooperative and to provide term finance for

modernizing the garage. Lacking experience in Africa, Alex Pneu Mcanique Looked to IFC participation for assurance to proceed in this

innovative venture. In addition to lending $1.3 million to upgrade and expand the garage, we helped work out a corporate structure

suitable to both partners.Since the takeover, productivity has dramaticalLy improved, with net savings to CBG and increased income for empLoyees. Operating

under the name ALex-Socatrag, the partnership has expanded beyond CBG, offering vehicle and equipment maintenance to other companies

in the region. Alex-Socatrag is but one example of how a global trend-the subcontracting of service-is extending to Africa, creating

opportunities for both Local entrepreneurs and new foreign investors.

Asia and the PacificON THE ROAD TO RECOVERY I

In FY99, IFC's In the smaller economies of Cambodia, the

Asian strategv Lao People's Democratic Republic, Mongolia, and the

was directed at Pacific islands, our top priority was assisting small and

rehabilitating and medium enterprises (SMEs). In addition to fundingdi

41 X 0 0 c ; _| consolidating the through three lines of credit, IFC continued to help

financial and small firms develop bankable projects by managing

corporate sectors two project preparation facilities: the South Pacific

of those economies Project Facility (SPPF) and the Mekong Project

______ hardest hit by the Development Facility (MPDF).

30 East Asian financial crisis. In those economies, some

progress has been achieved in strengthening the finan- Crisis Economiescial sector. In the corporate sector, Asian firms have The crisis economies of Indonesia, Korea, Malaysia,

begun restructuring their debts, shifting attention to the Philippines, and Thailand made significant progress

world markets, and rethinking industrial strategies. toward stabilization, despite an overall contraction of 8

But the region's external environment continues to percent in 1998. IFC's approach to restoring confidence

be fragile, and a full agenda of reforms awaits action.

Within this context, IFC's first priority is institution

building and good management, including greater

transparency for both business and government.

While aiding the crisis economies was a priority, _

IFC continued to assist the transition economies,

particularly China and Vietnam, in developing their

market systems. In South Asia we focused on building

financial infrastructure, expediting the transition to

international technology in manufacturing and agri-

business, and stimulating employment by encouraging

new entrepreneurs.

BANGLADESH INDONESIA MALAYSIA MYANMAR PHILIPPINES THAILANDCAMBODIA KIRIBATI MALDIVES NEPAL SAMOA TONGA

CHINA REPUBLIC OF KOREA MARSHALL ISLANDS PALAU SOLOMON ISLANDS VANUATU

FIJI LAO PEOPLE'S FEDERATED STATES OF PAPUA NEW GUINEA SRI LANKA VIETNAMDEMOCRATIC MICRONESIAAREPUBLIC MONGOLIA

in those economies can be summed up in the following ASIA AND THE PACIFIC: PROJECT FINANCING

sequence of interventions: (inlione f U S dEans FY99 FY98

* assisting our portfolio companies with restructuring Financing approved for IFC's account 913 740

or recapitalization Loans 534 479

Equity and quasi-equity* 379 261* emphasizing equity and quasi-equity instruments Loan syndications & underwritings approved 152 398

TOTAL FINANCING APPROVED 1,065 1,138and technical assistance in banking and corporatesector restructuring Financing committed for IFC's account 799 398

Loans 409 238

providing liquidity to the system through trade finance Equity and quasi-equity' 390 160Loan syndications & underwritings signed 164 370

facilities and other mechanisms TOTAL COMMITMENTS SIGNED 963 768

*Faddressing some of the underlying causes of the crisis Financing disbursed for IFC's account 463 451Loans 272 296

by focusing on institution building and deepening of Equity and quasi-equity' 191 155

finanicial sectors. Loan syndications & underwritings disbursed 195 512TOTAL FINANCING DISBURSED 658 936

Within this broad framework, IFC continued to assist Committed portfolio for IFC's account 3,375 2,917 v

crisis economies, taking into account each country's macro- Luais 2,443 2,247Equity 932 670

economic stability and the structure of its financial sector. Committed portfoLio heLd for others 2,586 3,259

In the corporate sector, particularly in Indonesia and (loan participations)TOTAL COMMITTED PORTFOLIO 5,962 6,176

Korea, IFC offered guidance and support to companies

attempting to restructure. Throughout the crisis economies, *IncLudes Loan and equity-type, quasi-equity investments.

we gave equity support to banks and other financial institu-

tions to strengthen their balance sheets and help them find

ASIA AND THE PACIFIC: FINANCING, FY95-99

(milieurs oU.S doLlaMs)

"IFC's first priority is institution . . :: .....

building and good management, . . .

including greater transparency for 1113 liii '

both business and management." 1 li i ililAPPROVALS COMMITTED DISBURSEDSyndicabons and undewriting U Syndicatioan and undeirting * Syndscafons and ndeswdtinq UFinancing io, IFrc owe accunt s Financing fur IFCs own aceount * Financing fur IFCs own account

Street vendor in Ho Chi Minh City, Vietnam, where IFC is working ASIA AND THE PACIFIC: PROJECTS AND COUNTRIES

with small entrepreneu'rs. FY99 FY98

APPROVALSNumber of projects 33 50*Number of countries 8 14

COMMITMENTSNumber of projects 45 30Number of countries 12 9

DISBURSEMENTSNumber of projects 34 33Number of countries 10 12BRevised FY98 figure.

66 6 6 |.6 .6 .. * - -u6 6.66

6. 6- . . 6 6 6

l~~~~~~~~~~~~~~~~tilzd IFC ha notI acivl inese thr fo alos 101 S3 * m. * * -'me 565 * 666 6 - 6 years Th.e Asia crsi *hne tha. In eal 198 .ea~~~~~~~~~~~~ ~dsge a quc-esos pla to hel Koea companies_

; .0 . 6,0 6 .'6 an6 o S.stin process.ng .6 sando through capital injectis and

f; f; :; l0t 0 $d 0 _ B~~~~~~~~~encalusssetane Sont dicosrean ecnoyisk soa higement andus

fiacroate gntttovernancedo example, them paticipatdi theretu

caital inres oftw first-tier banks and investe<d inthCe_ __ ~~~~~~~~~~~~~~brokerage, venture capital, and mutual fund industries.

6 Our second prioritv was to stimulate export-import_ ~~~~~~~~~~~~~~~~~activity by injecting liquidity into the system. Three trade

e d E ~~~~~~~~~~~~~~financing projects were developed to expand the availabilityI Dyes for sale at open-air market insAleru, Irdia. of short-term trade finance in Korea and simultaneously to

broaden the country's capital markets, In the corporatenew and profitable niches in the reformed financial systems. sector, we helped restructure several fundamentally soundSignaling the return of foreign capital to the region, midsize enterprises that faced liquidity problems. TheseprivTate sector investors joined us in launching a regional efforts, requiring considerable advice from IFC, are nowinvestment fund. the models for future Korean restructuring.

In Indonesia, IFC saw the first results of its substantial In Malaysia, the introduction of exchange-rate andrestructuring initiatives in earl), 1999, as the debts of a cement capital-account controls in September 1998 weakenedmaker and a hotel operator were successfully rescheduled. In investor confidence. Sponsors of two approved FY98addition, we provided long-term working capital to a textile projects postponed their imnplementation in view of thecompany that exports its products. Together with two other uncertainties surrounding the new economic policies. Eveninstitutions, we established the Indonesia Trade Credit Facility to though Malaysian firms have access to private funcls fromfurther provide working capital to export-oriented companies. home and abroad, IFC could potentiallv become involvedThe next phase of work will concentrate on supporting banks in financial market investments in the near future.

In the Philippines, IFC has focused on strengthening assisting the fledgling private sector in building institutions

existing financial institutions, assisting companies in restruc- fundamental to a market economy, particularly in the

turing balance sheets, and helping complete a financial plan financial sector

for viable projects. The FY99 investment program remained aiding in the reform of state-owned enterprises.

strong: five projects were approved in agribusiness, general

manufacturing, and financial markets. In contrast to the crisis elsewhere in the region, China

In northern Mindanao, we extended equity and was able to maintain its expansion at 7.8 percent in calendar

long-term debt to a regional power distribution company year 1998. IFC approved two projects in the less-developed

in need of expansion and efficiency improvements. We also interior provinces. We also assisted the Leshan city govern-

advised Manila Water Supply and Sanitation on structuring ment in reforming state-owned enterprises through

a competitive bidding process for a build-operate-transfer restructuring and strategic investments.

(BOT) plant designed to supply Manila with 15 percent of

its treated water. To help develop the country's bond market,

IFC and Thomson Bankwatch established a rating agency.

In Thailand, we concentrated on restructuring our k 33

portfolio companies, while looking for potential restruc-

turing transactions for new clients. In the near term, we will ASIA OPPORTUNITY FUNDTo recover from its economic crisis, Asia must imple-

focus on establishment of trade financing facilities and oni. ment large-scale corporate restructurings. But with a

corporate restructuring. shortage of expertise in this area, and with equity and

,, debt providers reLuctant to commit new resources,

Large Transition Economies ^ restructuring has lagged. Hence the Asia Opportunity

As both China and Vietnam shift to market economies, the Fund (AOF) is designed to jumpstart the region's

Corporation hopes to aid their transition by: economic revival by addressing both constraints.I | With $100 million in equity, the Corporation'sadvising on ways to improve the general investment climnate, largest equity investment to date, IFC joins Chase

including the regulatory framework for infrastructure and CapitaL Partners and several Asian investors in one of

other important sectors " the largest emerging-markets restructuring funds ever.Up to $750 million in investments are expected to be

placed over a three- to five-year period. Chase Asia

Equity Partners wiLL manage the fund in Hong Kong.In addition, we have established the $100 million

tz ; 11 l 11 |Asian Debt Facility to provide IFC loans and guarantees

. directLy to investee companies about to be restructured.

We aLso set up a $50 million Asian Co-Investment Equityp Facility to invest in companies when more equity is

needed to make restructuring possible.

Modern Furniture in Fiji built a newfactory withfunds secured with iassistancefrom the South Pacific P'roject Facility.

hi

IFC continued its technical assistance in banking and

securities market development to support Vietnam's transition

to a market economy. SMEs remain a priority, and in FY99 we

approved three projects through the Mekong Financing Line.

The MPDF arranged financing for 15 projects and undertook

It ~~~~~institution building.

Z ~~~~~~~~~~~~~South AsiaT ~~~~~~~~~~~~~~~~~~~Floods in Bangladesh, civil strife in Sri Lanka, and the effects

of the East Asian crisis resulted in a reduction in the average

growth rate to 4.5 percent across South Asia. Nevertheless,

some sectors did well, such as regional agriculture, India's

electronics and software industries, and the garment sectors

. | X | in Bangladesh and Sri Lanka. Primary IFC strategies in the

34 subcontinent included investing in the physical infrastructure;

strengthening financial institutions through technical assis-

tance, lending, and investment funds; supporting investment

in private health care and education; and supporting SMEs.

IFC resumed new business in India in 1999, after a

lull in project approvals stemming from the international

economic sanctions imposed after nuclear testing in May

1998. Among those receiving our support were India's first

private coal mine, a joint venture in the tractor industry, and

Cooling off at public standpipe in India. The country has caught the a compact disk recordables firm. Our priority remains toattention ofprivate international water companies willing to invest in exploit synergies between private infrastructure development

|and manage water utilities. IFC has an interest in financing socially epotsnrlsbtenpvt fatutr eeomnbeneficial projects such as private water systems. and financial markets.

_~~~~~~~~;,

0- .S * S .5 *S - 5 - - *--. .S

-~~~~5 . I-05*S I .*S 56

After three years of rapid growth in project approvals in

Bangladesh, IFC focused on implementing thosc investments, f

a difficult task in a politically volatile environment. In addition

to supporting nonbank financial institutions, we continued to

step up efforts in energy, infrastructure, and selected manufac-

turing industries, including agroindustry. Projects approved

in FY99 supported a power plant, a nonmetallic minerals

producer, and financial intermediaries.

Despite continued civil turmoil, leaders in Sri Lanka

recognize the need to improve local financial markets.

Consequently, IFC realized a number of investments,

from commercial and development banking to leasing Mrs Thoy Ho in a teafield that benefitsfrom her attention to leafand a credit rating agency. In conjunction with the World Iare government officials and MPDF Investmentcer m Van Thang (thirdfrom lefi).Bank's upgrading of the Port of Colombo, we arranged

BOT financing for the only private berth at that public 35

facility. The $240 million berth will increase employment, V N -VIETNAM: EXPORT-QUALITY TEAfoster competition, and reduce transportation costs, thereby M

strengthening the countrv's natural advantage as an interna- words. The country's second-largest tea exporter, Mrs.

tional transshipment point. Hoa shipped 2,000 tons to six countries in 1998. But

The recent inclusion of Nepal and the Maldives in the she measures her accomplishments by another yard-"Extending IFC's Reach" initiative has enabled us to develop stick-the degree tD which her growers continue toprojects with the potential for future approval, refine the quality of tea picked in Vietnam.

In 1993, Mrs. Hoa Left a state-run tea company and

Pa ci fi c Is La n d s : launched her own firm. Backed by personal savings andloans from reLatives and friends, the Thai Hoa Tea Co.

IFC investment has concentrated on industries in which the provides a market for 500 farmers in remote areas whoPacific island countries hold a competitive advantage, such ; depend on tea growing as a livelihood.

as tourism and fishing. SPPF secured financing for 15 small With annual sales now at $2.7 million, Mrs. Hoabusinesses, seven of them in the service sector. The facility's plans a $500,000 expansion and upgrade that wiLleffectiveness has benefited from a growing network of eight : generate 45 permanent and 200 seasonal jobs, in addi-

tion to empo oyment of 500 growers and 110 workers.SPPF agents. Technical assistance is also available to assist:Mrs. Hoa's expansion received a boost from the

newly funded clienLs. The Foreign Investment Advisory MMekong Project Development Facility, which helped her

Service advised Palau, Samoa, and the Federated States of* raise a $150,000 Loan from a local bank and, with Exim

Micronesia on ways to improve their investment climate. Bank India, arranged free advice from a tea expert onimproving tea Leaf quality and processing techniques,

* as weLl as on expanding her order base.Under IFC management, MPDF provides business

planning and financial analysis to local entrepreneursand helps match them with financing sources. Its objec-

7 tive is to promote privately owned SMEs in Cambodia,Lao PDR, and Vietnam. In those three countries in FY99,MPDF arranged financing of a combined $7.1 millionfor 17 projects.

Central Asia, the MiddleEast, and North AfricaINVESTING IN DIVERSITY

This was ayearof The Middle East and North Africamany firsts for IFC WVith its low reliance on foreign capital, the Middle

in Central Asia, East and North Africa subregion was only slightly

the Middle East, affected by the turmoil in foreign markets. The Asian

rfZ0- r::; _ _ and North Africa. crisis, however, did weaken world demand for such

C: Cf < :00;: _ _ IFC's held port- major exports as oil, gas, phosphates, and cotton,

4 c_ folio surpassed causing price dips that took a toll on economies reliant

$2 billion in FY99, on such earnings. Healthier growth rates were the______ t: 0 0 with new types of norm in those economies that depend less on oil and

36 investment activity in Algeria, the Arab Republic of that have already begun to implement reform and

Egypt, Jordan, Turkmenistan, and the WVest Bank and stabilization policies. Foreign direct investments in the

Gaza. Still, the disparate nature of the entire region Middle East and North Africa nearly doubled (to $5.9

poses a myriad of challenges. billion) in calendar year 1998, largely because of recent

By subdividing the vast, diverse region into three government reforms and successful privatization

geographical subregions, IFC can more efficiently programs in Egypt, Morocco, and Tunisia.

serve the particular needs of each. In the Middle East Despite this success, a lack of financial infrastruc-

and North Africa, we focus on financial sector devel- ture constrains resource mobilization for the private

opment, infrastructure, and industries that create jobs

and generate foreign exchange. In Central Asia, our _

priority is to support natural resource development,

small and medium enterprises (SMEs), financial sector

growth, and the rehabilitation and modernization

of selected postprivatization companies. In Pakistan,

economic sanctions and the attendant drying up of

capital flows prompted us to assist existing clients ~$$,with restructuring, while no new IFC investment was

approved. WAe expect to resume investing there in the

cominiig fiscal year.

AFGHANISTAN ISLAMIC REPUBLIC OF KUWAIT OMAN TAJIKISTAN UZBEKISTANALGERIA IRAN KYRGYZ REPUBLIC PAKISTAN TUNISIA WEST BANK AND GAZABAHRAIN IRAQ LEBANON SAUDI ARABIA TURKMENISTAN REPUBLIC OF YEMENARAB REPUBLIC OF JORDAN LIBYA SYRIAN ARAB UNITED ARAB

EGYPT KAZAKHSTAN MOROCCO REPUBLIC EMIRATES

sector throughout the subregion. To address this problem, CENTRAL ASIA, THE MIDDLE EAST, AND NORTH AFRICA: PROJECT FINANCING

governments have begun to reform financial systems. Such (mlis - i s. soLar;' FY99 Fy98

initiatives have allowed IFC to introduce new products and

institutions. More than half the projects that we approved in Financing approved for IFC's account 314 332*Loans 266 235k

the subregion in FY99 were in the financial sector, including Equity and quasi-equityt 48 97

mobilizing foreign capital and supporLing existing financial Loan syndications & undenrritings approved 182 234TOTAL FINANCING APPROVED 496 566*

institutions. Among new institutions created with ourthe first ventue life insurane companies inFinancing committed for IFC's account 22D 323

support were the first venture life insurance compaDies in Loans 165 218

Egypt and Jordan and a housing-finance company in the Equity and quasi-equityt 55 105Loan syndications & underwsritings signed 41 168

West Bank and Gaza. We also provided technical assistance TOTAL COMMITMENTS SIGNED 261 491

in framing the legal and regulatory structure for most of Financing disbursed for IFC's account 176 244

these projects. Loans 127 181

IFC investments in support of existing financial institu- Equity and quasi-equityt 49 63Loan syndications & underwritings disbursed 18 143

tions encouraged them to expand services to new and TOTAL FINANCING DISBURSED 194 387

underserved segments of the economy. For example. this Committed portfolio for IFC's account 1,454 1,400 37

year we supported the expansion of an Egyptian bank and Loans 1,141 1,115Equity 313 285

established two credit lines-for SMEs and housing loans- Committed portfolio held for others 621 555

through major Lebanese banks and a leasing company. (loan participations)TOTAL COMMITTED PORTFOLIO 2,075 1,955

Our assistance in Lebanon builds on our continued

commitment to postwar reconstruction. Since 1993, IFC has 'Revised FY98 figures.. ., , . tInc~~~~~Solodos loan and eqLity-type, 9U35r-eqLOt.y investments.

provided credit lines totaling $352 million, with syndications,

to 12 Lebanese institutions. The first two credit lines have

CENTRAL ASIA, THE MIDDLE EAST, AND NORTH AFRICA: FINANCING, FY5-99

'nri.Iisrs of U.>. dos.rrs)

. -~~~~~~~~~~~~~000

"After regional governments 525. . . . . - _'IO

strengthened their financial : : . . :.375

infrastructure, IFC introduced I | . .5 - | | - - 2

new products and institutions." 75

505 FY7 F0 Y7 FY99

APPROVALS COMMITTED DISBURSEDSy*diseti.sarud uaderltr Synditi-aton era dundrwrung Syndi-sansd e diunerwdng U

F hnancing fur IFC', eve arcunrt 1 hnancing fur f', IFCu*u soaunt U hnandug for IFC', **u -ccouut

CENTRAL ASIA, THE MIDDLE EAST, AND NORTH AFRICA: PROJECTS AND COUNTRIESKyrgyz residents of the village ofAla-Too get their water from pres-surizedpublic wells. FY99 FY97

APPROVALSNumber of projects 34 32*Number of countries 11 11

COMMITMENTS

Number of projects 21 35Number of countries 12 11

DISBURSEMENTS

Number of projects 21 33

Number of countries 12 11

'Revised FY99 hgures.

already generated loans to 90 SMEs in a range of sectors and participating in this project include grocery stores,

have created at least 3,200 new jobs. Housing lines approved pharmacies, medical clinics, electrical shops, restaurants,

in FY99 are consistent with our goal to deepen and broaden and computer training centers, as well as garment makers,

the mortgage lending market. Our extension of more than stone cutters, and carpenters. In the realm of direct SME

$150 million in housing credit lines to Lebanese banks repre- support, the "Extending IFC's Reach" initiative has made

sents more than half the country's $270 million housing six investments since FY97; these have created 217 new jobs

market. We are also working toward the creation of new and in the territories. We stationed a field officer and additional

WE ;n .u sustainable domestic sources of housing finance. staff in the territories to better serve our clients.

The West Bank and Gaza also benefited from this To mobilize foreign capital, IFC approved the Middle

4= 0 ,,3 approach. In FY99, IFC's microenterprise project, established East North Africa Environmental Fund, the first specializedv' -o

1< _ in FY97 in tandem with the World Bank, made 145 loans regional investment fund to provide equity and quasi-equity

; 2 4" worth $1.5 million, resulting in 250 new jobs. Microborrowers financing to commercial companies engaged in such environ-@j ui

mental enterprises as pollution control, renewable energy,

energy efficiency, and ecotourism.

| 38 | l The demands on infrastructure, strained by rapid

population growth and urbanization, are considerable. More

l than $350 billion in construction funds will be needed in

the Middle East and North Africa over the next 10 years.

i , - - *, * ,. - -. . . With treasuries already stretched thin, some countries have

55i 3*13 53 - 3 . -

.g -s* 5355 .,

. 5Main bazaar in Kyzyl Kiya, Kyrgyz Republic. FIAS advised the

l ~~~~~~~~~~~~~~~~~~~~Kyrgyz governmenlt on its foreign investment climate.

I .s 5 .5

*5I 5*.- . - 5 * .-

I -g . - *.35

l 3

l *.I-u .e

UZBEKISTAN: GIVING SMES A BOOSTIFC's $30 million credit line for on-lending to SMEs means more jobs for Uzbekistan. The credit line, managed through three local banks,

wilt allow entrepreneurs to expand and modernize their businesses and, in the process, provide new jobs to the country's growing work

force. The need is clear: half the Uzbek population is under 25, and older workers are subject to the continuing layoffs in and closings

of Soviet-era enterprises.

One of the major constraints on SMEs in Uzbekistan has been limited access to term financing. Thus IFCs credit line will promote

technology transfer that leads to greater productivity, fosters entrepreneurship, and enhances financial management skills necessary for

the successful operation of a business in a free market economy.

An additional benefit of the project will be to advance the skills necessary in market-based banking. Through close coordination with

the World Bank, training in project finance and credit risk analysis will be offered to staff of the participating local banks. Such skills will

become the basis of Uzbek banking's capacity for undertaking financial intermediation.

begun to open their economies to private investment -

in infrastructure. For example, IFC's FY99 approval of

financing for a power plant will support Egypt's first

independent power project.

To generate foreign exchange and create employment,

FC invested in agribusiness, tourism, pharmaceuticals,

and textiles in FY99. We supported agricultural ventures 3.

in Jordan, the West Bank and Gaza, the Republic of Yemen,

and Egypt, where the expansion of a dairy is expected to Xgenerate 1,640 new jobs. We also approved four tourism

projects in Egypt and the West Bank and Gaza, including

the Bethlehem Jacir Palace Hotel, which will be the West Bank

and Gaza's first international-standard hotel and the single t ilargest construction project to date in the territories. This

project complements Bethlehem 2000, a program of major

events, infrastructure renewal, and tourism development,

supported by the World Bank and major donor countries.

In Algeria, IFC arranged the country's first B-loan

syndication for a pharmaceutical project that will result

in substantial transfer of technology, foreign exchange,

and 235 jobs.

One major challenge for the Middle East and North

Africa is establishing transparent legal and regulatory

frameworks as a base for private sector development and

investment. To that end, IFC provided technical advice in Palestinian workers on the construction site of the Bethlehem Jacir

privatization, insurance, taxation, and other essential financial Palace Hotel the largest building project to date in the West Bank andGaza. This is among 15 projects IFC has supported in the territory

matters. IFC's Foreign Investment Advisory Service (FIAS) since 1994

conducted two projects in Egypt, helping develop both an

FDI database and a general investment promotion strategy.

CentraL Asian RepublicsEconomic performance in the Central Asian republics

subregion was hit hard by the Russian and East Asian crises.

With less demand for major exports such as oil, gas, metals,

and cotton, prices fell, causing a drop in export earnings.

Currencies in all republics felt the pressure, showing significant

1S depreciation against the dollar, particularly in Kazakhstan

and the Kyrgyz Republic.

In light of these conditions, IFC focused on investment

000 :,:r 0 | =: " in the financial sector, support for SME growth, and selected

manufacturing investments. In addition, because the legal and

regulatory frameworks in the region are not yet conducive to

attracting foreign capital investment, FIAS helped several

republics improve their investment environments.

40 ~~~~~~~~~~~~~~~~~~~~As in the Middle East, the absence of financial infrastruc-

ture hurt private sector growth. To address this need, IFC has

provided investment capital to strengthen existing institutions

as governments have initiated financial sector reforms.

In Kazakhstan, IFC approved a loan to Bank TuranAlem

to improve its balance sheet and increase its liquidity, a sign

of confidence in the Kazakh banking sector. We also approved

an agency line for on-lending to SMEs in the Karaganda

Forum de Beyrouth, a trade showfacility in Lebanon, receivedfunding region, where industrial restructuring has meant loss of jobs.from the Banque Libanaise pour le Commerce, drawing on an IFCcredit line targeting SMEs.

* F 66 6 . - i .666 .6 6 66 S . - S a a6 a 6 a 66 1.

56 6 6. 666 * S .6.6. ..

KAZAKHSTAN: DOMESTIC COOKING FUELSince the collapse of the Soviet Union, the liquefiedpetroLeum gas (LPG) industry has received aLmost no

- .investment in the former Soviet repubLics. InKazakhstan, where LPG is the domestic cooking fuelof choice, Lack of LPG can pose a hardship.

In the Kyrgyz Republic, IFC is working closely with To heLp restore a reliable suppLy of LPG to provinciaL

FINCA, a microfinance program that lends to the poorest areas, IFC has approved a $20 miLLion toan that will help

people of the republic: 90 percent of its 8,000 borrowers are - renovate and modernize Alautransgas, the country's main

women starting home-based businesses. With IFC assistance, distributor of LPG. IFC has also recruited Primagaz, a: leading European LPG distributor, as a technical partner

FINCA is attempting to convert from a nongovernmentalintepoc.Pragzwlovseimoeetsn-in the project. Primagaz will oversee improvements in

organization to a regulated financial institution as it safety standards to bring them up to internationaL levels.

continues to provide capital resources commercially. LPG is an environmentaLLy benign fuel, since it

Building on the "Extending IFC's Reach" initiative, the is ash free and produces less carbon dioxide than aLter-

Corporation has intensified its support of the SME sector native fue[s, particularly wood and coal. Natural gas,

in Tajikistan and Uzbekistan as well as in Kazakhstan, the i though more convenient to use, is not readily available

Kyrgyz Republic, and Turkmenistan. All five countries are outside urban areas.

served from IFC field locations in Almaty, Tashkent, and

Bishkek. Plans call for satellites in Ashkhabad and Dushanbe.

Most direct SME investments in Central Asia have been

arranged in cooperation with local financial institutions. 41

During FY99, IFC disbursed funding to a construction mate-

rials manufacturer in Kazakhstan and a furniture maker

in Tashkent. We also approved investments in Uzbekistan

for an Uzbek-Dutch joint venture to produce cheese for s

the local market. In the Kyrgyz Republic, we approved _ _ __

two investments, one in a recently privatized agribusiness

collective and the other in a Kyrgyz-Chinese joint venture

to manufacture cardboard packaging.

All the Central Asian republics will require significant

foreign capital and technical expertise to transform their

centrally planned economies.- t~~~~~~-o

PakistanIn Pakistan, IFC devoted attention to existing clients who

suffered the effects of the country's economic crisis, particularly Settavex has begun an expansion that will boost the competitivethose in the textile, power, and cement industries attempting to position ofMoroccos textiles sector. With FCf inancing, the manage-

ment team featured here will hire 50 more people and diversify itsrestructure projects. Still, not even IFC help could allay investor product mix. Employee-friendly, Settavex is divided into self-sustainingcaution resulting from Pakistan's nuclear testing and slow profit centers. Each minicompany promotes team spirit and fosters a

sense of ownership and responsibility in employees.economic growth.

Although we approved no new investments in Pakistan in

FY99, our Corporate Finance Services advised the government

on the proposed privatization of the Faisalabad Area Electricity

Board. The Corporation expects to resume investment activity

as the Pakistani economy improves.

EuropePERSEVERING THROUGH CRISIS

The Russian already signed, had to be revamped. We consulted with

financial turmoil sponsors on how to scale back the size of projects and

in FY99 spread reorient markets to regain viability. In addition, we

well beyond prepared for the aftereffects of the crisis by strength-

national borders, ening our portfolio supervision through more frequentILL

causing varying reporting, decentralized monitoring by field locations,

degrees of and greater attention to risks in project analysis.

economic decline To strengthen banking sectors, financial infra-

in other Central, structure, and capital market efficiency, IFC supported

42 Southern, and Eastern European economies. Trade institution building throughout the region. In line

volumes, transfers, and tourism fell drastically in some with the World Bank's goal of advancing European

countries. Trade finance and payments system arrange- financial sector reforms, we increased our emphasis

ments were disrupted. External private financing on restructuring banks and improving the regulatory

declined, and the cost of credit rose sharply. Many framework and its enforcement. We also provided

countries in the region suffered lower foreign exchange technical assistance and financing for privatization.

earnings, tighter fiscal constraints, declining credit We supported small and medium enterprises (SMEs)

to the private sector, slowdown in growth, and higher by extending lines of credit and advising on technical

unemployment. As the crisis spread, foreign financing

became more scarce and more expensive. Although the

effects were not uniform across the region, the crisis

underscored financial sector vulnerabilities, even in

countries that had initiated strong adjustment programs

before the crisis.

Despite such distressing conditions, IFC's client

firms and banks in the region generally weathered the

crisis. We worked closely with project owners and

managers to develop joint responses and advise on

possible protective measures as the crisis unfolded.

Some projects, whether at the preapproval stage or

ALBANIA BULGARIA GEORGIA MOLDOVA SLOVAK REPUBLICARMENIA CROATIA HUNGARY POLAND SLOVENIAAZERBAIJAN CYPRUS LATVIA PORTUGAL TURKEYBELARUS CZECH REPUBLIC LITHUANIA ROMANIA UKRAINEBOSNIA AND ESTONIA FORMER YUGOSLAV RUSSIAN

HERZEGOVINA REPUBLIC OF FEDERATIONMACEDONIA

matters. In joint ventures, we created models for attracting EUROPE: PROJECT FINANCING

investment throughout the region. Because IFC strategy I-rl1ri- of J.S. .,ot.or') FY99 FY9s

includes building close relations with clients and expanding

our presence in the field, we now have a fully decentralized Financing approved for IFC's account 678 838*Loans 471 622*

department in Moscow that serves Armenia, Belarus, Georgia, Equity and quasi-equity4 207 216

the Russian Federation, and Ukraine. In addition, most of Loan syndications & underwritings approved 225 622TOTAL FINANCING APPROVED 903 1,460*

our 16 field locations in Central and Southern Europe arcFinancing committed for IFC's account 733 614

colocated with the NATorld Bank. Loans 478 507

Equity and quasi-equityt 255 107

Loan syndications & underwritings signed 259 469Country Approaches TOTAL COMMITMENTS SIGNED 992 1,083

Despite the impact of the crisis on the Russian Federation, Financing disbursed for IFC's account 472 493

IFC made several commitments and approvals in key sectors Loans 379 391

in FY99. In Russia's energy sector, which accounts for the bulk Loan syndicatons 8 underwritings disbursed 2q79 -22

of the country's export earnings, we approved an oil field TOTAL FINANCING DISBURSED 751 1,015

development project. In the distribution sector, we committed Committed portfolio for IFC's account 2,346 1,801

to a large retail and distribution project that consistently EquLty 1,580406 1,4038

provides lower-cost, high-quality food and nonfood items Committed portfolio heLd for others 1,091 979

to the domestic market with improved service and modern (Loan participations)TOTAL COMMITTED PORTFOLIO 3,437 2,780

retailing techniques.

Given the collapse of the banking sector, our participa- 'Revised FY98 figures.tlnclsdes Ivan and equity-type, quasi-equity investments.

tion in a large joint venture leasing company underscores our

commitment to support alternative sources of financing. We

EUROPE: FINANCING, FY95-99

(n 1l,io-5 of U S. dolIars)

l _: | . . . . . 800

500

*l -g-sz g as e|l -| - 1 LY F Y96 FY989 FY99

APPROVALS COMMITTED DISBURSEDSyn,dications and undeeng U Sy,dicions and underwrting Syndicin ad ud oti

F-nanang fo, IFCs sen account S Finan-ig fo, IFC's own account U hnacing for IFC' own account

Participants in IFC Larid Privatization and Farm Reorganization EUROPE: PROJECTS AND COUNTRIES

Project in Ukraine plant sngar beets in Chernivtsi Oblast. FY99 FY958

APPROVALSNumber of projects 49 74*Number of countries 16 18

COMMITMENTSNumber of projects 56 57Number of countries 19 16

DISBURSEMENTSNumber of projects 57 45Number of countries 17 13*Revised FY98 figure.

I provided the leasing industry and national regulators

-< with technical assistance that reviewed regulations, offered

training, and managed a public relations campaign.

In agribusiness, IFG committed to investing in a new

comnpany that harvests wheat and other grains. We also

approved an investment in a yogurt producer and provided

technical assistance to its supply netwvork of dairy farms.

Unlike a number of private banks, IFC fully intends to

invest in Russia in the year 2000.

0 0: 2 | 0 1 i _ l l l l l l _ l Turkey withstood the crisis relatively well. GDP growth

LU 0 0 I 0 - Z _ l I | I 3 _slowed, but this helped curb inflation. The government madesignificant progress in privatization, tax legislation, and banking

reform. Because Turkey lacks access to regional multilateral

institutions, our role as the only major source of long-term

+:44 X X l 9 . l i finance for the private sector is vital. We continue to support

the private sector's modernization and restructuring efforts tocapitalize on Turkey's customs agreements with the European

Union. We approved financing for manufacturers of carpets,

tractors, tire cord, ceramics, and cement.

Privatized Czech building products manufacturer Cembrit Bohemiasupplied roof tiles to this restaurant, after making an IFC-financed Eastern Europeconversion from the use of asbestos cement to cellulose-based cement. The Russian crisis spilled over into the economies of Eastern

Europe. In Belarus, IFC with USAID assistance helped 14

cities privatize more than 700 small enterprises. Working

_~~~~~le: **U

______*gs 6-- *6666.-.66 6 -S-

~~~~~~* 6 = = _ . 1 . * * S . 6 * ~ ~ .

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_~~~~~ ~. S6

_~~~~~~- 6U6~. 6.6 6 66 .6 6

S=__ . 6 - 6 6 - * ~ 6 * . . 6 . 6..

with the U.K. Know How Fund, we continued to assist SMEs

through business centers and a nationwide information

campaign and training program. We have helped Belarussian

entrepreneurs raise more than $6 million in financing. The

crisis hit Moldova's economy hard, causing economic reform

to stall. Still, IFC concluded a path-breaking telecommunica-

tions project. . , * _

In addition to high inflation and significant currency .vs

depreciation, Ukraine suffered a declining GDP for the ninth 5 9S.*

consecutive year. IFC was particularly active in Ukraine in S 9

FY99, with nearly 200 local staff. Our Business Development

Project, with assistance from USAID, is working to develop

the country's leasing sector. Three new business centers joined *

the eight already established to offer training, information ..

resources, and consulting to SMEs. The Small-Scale Privatization 45

Project expanded in FY99 to help municipalities privatize

unfinished construction sites and social assets. We also .

committed to invest in a local commercial bank that will

on-lend to private domestic companies.

CaucasusIn the Caucasus, the Russian crisis and lower oil prices

depressed economic performance. Although the economy

in Armenia grew, exports fell, and the country suffered a

sizable reduction in remittances from Armenians living in

Russia. With help from the Netherlands, we will launch our

first project in Armenia, which will provide training in best

corporate governance practices and advise the government

in the area of corporate governance legislation.

Azerbaijan experienced its third consecutive year of

growth. IFC approved loans to international oil companies

for rehabilitation of oil fields and pipelines that will carry ae it f

Azeri oil through Georgia to the Black Sea. In addition, we ,t. .$

approved a loan for the expansion of an existing hotel and . c3office complex in Baku. In Georgia, we invested in a bank

that will lend to micro and small enterprises. IFC approved

a credit line to a Georgian commercial bank for trade finance, /

working capital, and project finance.

Walking through Pushkin Square in Moscow, where IFC providedadvice and approved financing to strengthen the leasing industry.

Central Europe an investment that will expand facilities and product inventory

While most Central European countries had already completed of a pharmaceutical import and distribution company. We

the first phase of liberalization, privatization, and macroeco- aided the expansion of capacity and geographic coverage of

nomic stabilization, some suffered setbacks in FY99. The the cellular telephone network.

Czech Republic was hurt when large enterprises, divested

through voucher sales to undercapitalized investment funds BaLticsor creditor banks, failed to generate investments. IFC, To meet the growing demand for housing finance, IFC

however, will invest in a formerly state-owned Czech bank. approved a loan to a bank in Estonia that will offer affordable

We played an important role in moving the transaction home mortgages. We will also help an old Estonian kraft

forward, working with a major international bank to help paper mill increase capacity and efficiency while raising envi-

restructure and privatize. This would be the largest equity ronmental standards. Renovation of Estonia's only cement

investment we have ever taken in a bank anywhere. The plant, including construction of a cogeneration power plant

Foreign Investment Advisory Service prepared a diagnostic and expansion of a port, will also receive our support. IFC

reassessment of the Czech foreign investment climate. We made its second investment in an Estonian pulp and paper

46 also supported establishing local rating agencies in both plant in order to support its modernization. In combining

Hungary and the Czech Republic. In Hungary, we agreed commercialism with a dedication to cultural preservation, we

to support a fiberboard project and committed financing will develop small "townhouse" hotels in historic buildings.

for a leasing company that specializes in helping SMEs. In Lithuania, IFC has provided postprivatization

In the Slovak Republic, we focused on medium-term support and has approved investment in a color television

funding and technical assistance to SMEs. We also approved picture tube factory to modernize production, reduce costs,

;S - gut_ _

36 S- 66 3 6 ! 66.6!. 6 ~6* S 06

* - l -1 .. . *6 6 6 - 6 6 . .. - . 3 - 63 3 6 .. . 3

S !1 S . 6! * 6.

63. 3. 66 S6.6 -m S.666 6 .

* 6. 16 6. * 66 .3 = 3.~ 3~ .63

6 .* 36 .6= . 6 3.6.. 9 *S *9~*6*

- 6. 6 6. 6 S 66 - . . 66 6 6 - . 66 6 6 6 6 3

~~~~~~~ 6. 66.. 6

I. 6 5 6 I .6** 3666 6 - - 65 6 6

I. E * lm i lum. 6- 6 366 -6 .~6 363

66.6 - I *6 . . 6S -6

l6 -i ,i *: I m6* - 6.6 * 3~*.66 ~.-

* 6 - * * 6 . e . I- 3

I l .6 . . -. *63 6S 6 - .S*6- 6.6 .

9.3 -I6 6 .* . S . . .

COURTESY OF BELISCE-BEL TVORNICA PAPIRA POLUCELULOE I KARIONAZE

and improve quality. An IFC loan to a local bank will help

meet the growing demand for home mortgages and ease

funding constraints on SMEs. The loan will strengthen the

bank and set standards for the Lithuanian banking sector.

BalkansPrivatization and reform lost momentum in FY99 as the

regional crisis shook the economies of the Balkans. In i j

collaboration with other international agencies, IFC will w 4,

support a microcredit lending operation in Albania. WAe

also agreed to finance the construction of a cement bagging

terminal in the countrv's main port. As one of the few

sources of term financing for the private sector in Bosnia

and Herzegovina, IFC supported both the revitalization

of the only pharmaceutical company-damaged during 47

the war-and the expansion of an integrated meat packing

plant. In Bulgaria, we invested in the rehabilitation and

modernization of the country's largest pulp and paper mill.

IFC will invest in Bulgaria's first bank privatization. We also

helped a tledgling financial institution become a fully func-

tioning, commercially viable bank and supported SMEs

through a credit line to this newly independent company.

In Croatia, we supported SMEs through a credit line

and an investment in a venture fund. In the Former Yugoslav

Republic of Macedonia, too, we are backing the SME sector

through an equity investment in a venture fund. Here, we

helped a pharmaceutical company raise its standards in order

to enter the West European market. IFC continued to assist

FYR Macedonia's largest bank in its attempt to attract a

strategic partner. In Romania, IFC advised on privatizing

the capital's water system and agreed to support the onlyp Ivaeyow dpl n pae mil in '11' ounr by In Croattia, Belisce-Bel has reb6iilt and modernized its war-damiaged

and aging corrugated cardboardproduction line with IFCfinancingmodernizing its technology, enhancing its competitiveness, and brought it into environmental compliance. The funding was

and opening new export markets. lFC also committed to crucial to the survival of one of Croatias major manufacturingfacili-ties and exporters. During the war, the factory stood in a vulnerable

invest in one of Romania's first banking privatizations. spot along the Drava River, within reach of enemy fire from the opposite

riverbank. The town of Belisce so values this employer of 2,300 thatit assisted the company in defending its plant by letting it use the onlylarge weapon available, an old cannon from the town museum. Four-teen employees lost their lives in attacks on the complex or elsewhere intown, but production never ceased. Impressively, Belisce-Belpaid itsfinal semiannual installment on its second IFC loan while under shell-fire. The photographs showv one of the production lines before (above)and after (below) the installation of new equipment, which was partof the FY98-approved project, Belisce-Bels third IFC loan since 1973.

Latin America and the CaribbeanUNPRECEDENTED DEMAND FOR CAPITAL

The past year has IFC sharpened its strategic focus in areas

been particularly where needs are greatest and it can play a significant

difficult for Latin development role. Our strategy is to deploy our limited

America and the resources to ensure the health of our portfolio compa-

Caribbean, as the nies, to continue assisting high-development-impact

crisis that began in sectors such as financial and physical infrastructure,

E Asia spread to the and to concentrate on middle-market firms and the

region, accentuated smaller and midsize economies in the region. We

-X by the Russian continue to invest in transport, utilities, and power

48 debt moratorium and Brazil's move to a floating and to seek out investments in newly reformed sectors.

exchange rate regime. The private sector has borne We are also providing long-term capital to regional

much of the impact of the Asian crisis, with drastically banks for on-lending to smaller firms and to institu-

reduced access to international credit. Net private tions that broaden and deepen domestic financial

capital flows dipped from $105 billion in 1997 to sectors, such as pension funds and housing finance.

about $85 billion in 1998. From August 1998 onward, We maintain our support for pioneering private

the region has had virtually no access to external investment in social sectors such as education and

capital. This market retrenchment, combined with health care and place particular emphasis on midsize

low domestic savings, has created a strong demand

for private sector financing from official institutions.

IFC faces unprecedented demand from local financial

institutions, blue-chip regional firms, middle-market

firms and small and medium enterprises (SMEs), and

foreign investors trying to assemble financing packages.

At the same time, many of our existing clients confront

both rapid macroeconomic shifts and tight credit. We

responded to this difficult situation with approved

financing of $1.24 billion from our account for the

region-a near-record level-and $1.21 billion in

syndications.

ANTIGUA AND BOLIVIA DOMINICA GUATEMALA MEXICO ST. KITTS AND NEVISBARBUDA BRAZIL DOMINICAN REPUBLIC GUYANA NICARAGUA ST. LUCIA

ARGENTINA CHILE ECUADOR HAITI PANAMA TRINIDAD AND

BAHAMAS COLOMBIA EL SALVADOR HONDURAS PARAGUAY TOBAGOBARBADOS COSTA RICA GRENADA JAMAICA PERU URUGUAYBELIZE VENEZUELA

economies such as those in Bolivia, Peru, and the Central LATIN AMERICA AND THE CARIBBEAN: PROJECT FINANCING

American countries. ininloo, of L.S. do.lr-) FY99 FY98

This strategy translated into the approval of 10 projectsfor improving domestic financial intermediation; 25 projects Financing approved for IFC's account 1,237 1,057

Loans 864 758in industry and services, 12 of which are for middle-market Equity and quasi-equity, 373 299

companies; 13 projects in infrastructure; 8 projects in agribusi- Loan syndications & underwritings approved 1,212 948TOTAL FINANCING APPROVED 2,449 2,005

ness; 2 projects in social services; and 22 advisory assignments.Financing committed for IFC" account 807 1,012

Loans 612 783

Country Approaches Equity and quasi-equity' 195 229Loan syndications & underwritings signed 282 1,213

The crisis that began in Asia highlighted structural weaknesses TOTAL COMMITMENTS SIGNED 1,089 2,225

in the region and the need for continued economic reform. Financing disbursed for IFC's account 802 700

Domestic savings, at approximately 20 percent, must rise Loans 675 545Eqsity and qsasi-eqsity, 127 155

to achieve more sustainable growth and reduce reliance on toss syndications & underwritings disbsrsed 659 886

external finanicing. The cost of intermediation, over 8 percent TOTAL FINANCING DISBURSED 1,461 1,586

in some countries, must be brought down by improved effi- Committed portfolio for IFC's account 4,528 4,245 X

ciency if private investment is to increase. Access to capita] has Equtns 358 3,3685

to expand, especially for middle-market firms and SMEs and Committed portfoLio held for others 3,702 4,070

less-developed areas of the region. The efficiency and quality (loan participations)less-developed areas ~~~~~~~~~~~~~~TOTAL COMMITTED PORTFOLIO 8,230 8,315

of infrastructure services must also increase to support the

private sector's ability to compete in international markets. 'IncLudes oan and equity-type, quasi-equity investments.

Finally, more social services must be offered privately to lessen

the fiscal burden on the public sector.

LATIN AMERICA AND THE CARIBBEAN: FINANCING, FY95-99

l(ri.[lor ocf U.S. coUaro

* 5 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~2,450. . .:: -:: ::: .- -:.. 2,200

.~~~~~~~~~~1,750

1,450

01~~~~~ ~ ~ ~~~~~~~~~~~~~~ .l .. .: .: . 950s7,00

[1 11 EX 11 El IL t11 t ll -10111 1i,.- ~~~~~~~~~~~~~~~~~~~~~~~950*1 a ga 5DL * *5 Fy99FY96 FY97 FY99 FY99

APPROVALS COMMITTED DISBURSEDSy_dioation- and und-rntingn Sy*ndlcation- and unoaroning U Syndications and unonrn-its

Financing fon IFCs own account 55 F-narerg f5r IFCs own acco-nt U Frnanocng fon iFCs own account

In Bokvia, Inti Raymi S.A. uses profits (rom its IFC-fi LATIN AMERICA AND THE CARIBBEAN: PROJECTS AND COUNTRIESIn Bolivia, lnti Raymi S.A. nuses profits,from its IFC-fnanced gold mineto support the Inti Rayrni Foundation, which assists local craftspeople, FY99 CY 98

markets their creations, and supports other social and healthy programs. APPROVALSNumber of projects 58 67Number of countries 16 17

COMMITMENTSNumber of projects 50 49Number of countries 16 13

DISBURSEMENTSNumber of projects 46 45Number of countries 16 12

In Brazil, the continuing economic uncertainty

curtailed access to international financial mnarkets for large

corporations as well as for the largest pool of middle-market

The Fortuna hydroeleceric dam in Panama was privatized in January. companies in the region. Because many firms that previouslyIFC acted as n^ancial advrisc. |ii ngecolDi IcrtllJ

enjoyed access now need significant investment capital or

liquidity support, and because Brazil already constitutes

IFC's largest portfolio by country, demand far surpasses

IFC's resources. In this new environment, we are attemptingdi

:,, .to reduce the Custo Brasil-particularly the high costs of-o

.me _ . . me- - m. * a- - .5 business with regard to transport-and to improve access

-: _ . .3. ' - 5 S.to investment capital.

Ei - * * 5 * 5 5 . '5 5 '" IFC continued strengthening domestic financial inter-

mediation through an investment in a mortgage finance

-J . ,,**** . .company, helping to broaden nonbank financial services.

50 _ _ We were directly involved in financing middle-market

companies, with projects approved this year in auto parts,

*s. sl l sz E . *shoe manufacturing, and petrochemicals.

In infrastructure, the Corporation's financial support has

extended to a state toll road linking Sao Paulo, Campinas, andi 5 _ _ - _ _ 5* ._ _..5.

Limeira. We continue to advise on a private concession for

_ .5 water treatment in Fortaleza and a metro line in Sao Paulo.

*a p K _ _ _ . * *. * *Finally, financial assistance was provided for an investment

*zn a . a a a a . . . a . .company in private health care services-our first project in

1 S. * 5 _ 51 the Brazilian health sector.*~~~~ . .. 5 5 *.

Argentina's close links to Brazil are dampening growth

and cutting access to international markets, in spite of

continued macroeconomic stability. W8hile blue-chip firms

have maintained limited access to domestic bank financing,

other firms largely lack access to any debt capital and, in

some cases, to trade financing. IFC's operational priorities

E S S . . 0 * S . S S . in the country center on middle-market firms, "frontier

sectors" such as the private provision of social services, and

the less developed provinces. We backed the world's first fully

privatized national postal service and a company specializing

in infrastructure concessions, and we gave financial assis-

tance for expansion to a private university.

LFED ANh B URAL DE KFB9ENSMI\CRTI ALM THhE tCOST

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(cutdWO(n? DW th a - aW a Bl) 1©iap bM X ft ARsLo WtC3(ftl X a t Mtd W thft Q43GtA y©m ttUaQl&lNft©t o

adS naf aD )6sa a I)f tha kimWW at tEal75gED!117f t 1 td MM aSot. Ia atitatad sallE nasa psastaa((ttgaKc h umv0m- %t(r) &gmw1@~ X0)m.o MW wpD@ 9AY&a gnmT e mpll&mgm S~wm ID0ug Cw (XX lo(Kl'Vmh

tada>taaa !Q@@s 9Ia6M a sp4mtvotal ss1lt9aa atdo@ ixstsaalEj &yataat %nHalMSJI!(Jja satabstEta. stat Rlast tEa italaaW3dkJ2 upp5l mw 1?1%rD0Q)f A&Dfa mnd CqWl)SRmw wftux Xt P ( (d th uGx)slt( mam, %"w$ MS1Wh mmW lp)cnt ritl fg[tefto

T4 dimpwntvk % vgpw) t/ en mW witF@io Wm @ley pmfM bMIa =hgng0,Af@ r3 h6 ) tN woJJ5Wfl&%2

Mexico's first-tier companies have maintained better,

albeit limited, access to international capital than firms from - _

almost any other emerging market, largely through close grelations with U.S. commercial banks. In contrast, most other 5 51

domestic corporations lack such access, owing particularly

to weakness in the banking sector. IFC is supporting SMEs

and is looking for ways to improve domestic bank funding

intended for on-lending to those companies. We extended a

credit line and invested in an equity fund for middle-market

firms and SMEs. In direct financing, we supported a midsize

hotel chain and a middle-market producer of steel. Technical

assistance efforts focused on banking and securities regula-

tory and supervisory practices.

Andean CountriesThe Andean countries have experienced different but signifi- IF

cant downturns in economic growth since 1998. All suffered

from a tightening of international credit and lower export

prices. The El Niino phenomenon battered Peruvian exports. I

Continued low oil prices and a large fiscal deficit hurt

Venezuela. El Nifno and low oil prices also affected Ecuador,

prompting a 20 percent decline in exports and a growing For]a de Monterrey, a Mexican forging plant that produces large

fiscal deficit. Fiscal correction and low oil prices had an automotive parts, installed new equipment with IECfinancing.

adverse impact on Colombia. The Bolivian economy, less

touched by external factors, grew by nearly 5 percent over

the period. IFC has given more attention to these countries,

because their private sectors encounter greater difficulty

getting the capital they need from global markets.

In Peru, IFC activity continues to expand, resulting in

a project approved in mining and three in agriculture, our

priority sector. In Bolivia, we opened a field location in La

Paz to support the country's private sector development

efforts under the W\orld Bank Group's Comprehensive

Development Framework pilot. Approvals included financing

for a water system and a power distribution project in La Paz,

a microfinance institution, and gas development. W\e also

approved two industrial projects in Ecuador, two projects

in the hydrocarbon sector and a power distribution project5; tr t 1 l g F F m in Venezuela, two projects to develop domestic financialCD

00 0050AgeE in pri vacized postal service sports a new look and style well institutions, and one in the hydrocarbons sector in Colombia.

C z ; I as offering improved performance. The Foreign Investment Advisory Service (FIAS) provided

technical advice on foreign direct investment promotion and

| 52 | | incentives in Bolivia and Colombia.

_ Central AmericaHurricane Mitch wreaked havoc, particularly in Honduras

and Nicaragua, where infrastructure and crops suffered signifi-

cant damage. IFC has responded by encouraging domestic and

_-* , .* - * foreign investment, with emphasis on regionwide investments

in the financial sector, infrastructure, and social services.

S I , , U S To improve service to clients and offer easier access to

smaller firms, we opened a regional field location in Guatemala

Citv for Central America and Panama.

* Ws7e approved nine projects in this subregion. Notable

*= * , * *. * - - - * *. ** * * ,this year were two regionwide projects: a retailer and an invest-

* .. - - .. . - - - . - . - . -. . ment company in electricity. The feasibility of a cross-border

__.a * -s . -is a . highway and port project is being studied with technical

assistance from IFC. In line with our priorities for the region,

-we also supported producers of agricultural hand tools and

car batteries in El Salvador, a distributor of pharmaceutical*S . 5 -l - S.* i

= - , * * ,. * * - products in Nicaragua, a railway and commercial bank in

*= * *..-Panama, and cellular phone and agribusiness projects in

== . - . . - - a a - a a a a-Honduras. We advised the government of Panama on

= as - a * -a S . 5 a - . structuring the newly privatized state power utility. FIAS

provided advice on foreign direct investment in Costa Rica,

Guatemala, Nicaragua, and El Salvador.

- ; -1 I- .5 - * . *5 *5l

CaribbeanCountries in the Caribbean suffered sluggish growth in

FY99, resulting in part from weak commodity prices. IFC

established a local presence in Trinidad and Tobago and

continued its support through the "Extending IFC's Reach"

initiative. WVe plan to expand this program to the Dominican

Republic and Haiti. WVe approved two projects in this region:

a retail project in St. Kitts and Nevis (IFC's first investment

ever in the country) and an industrial gas project in Trinidad -

and Tobago. In our continuing effort to strengthen support

for smaller companies, we established a $50 million regional

loan facilitv with the Bank of Nova Scotia. In addition, our

backing of a Central American retail chain is enabling it to

open a number of stores in the Dominican Republic. In

coordination with the Organization of American States.,

we are providing technical assistance to small independent

hotels on upgrading standards and marketing.

IFC client Centco Internacional de Medicina (CIAIA) is buildingand operating a chain of high-qzzality private hospitals in Mexico andCentral America, including tiis facility in Hersnosillo, Mexico.

EL SALVADOR: AFP PREVISION PRIVATE PENSION FUND MANAGEREl SaLvador is the first country in CentraL America to repLace its state-run, "pay-as-you-go" social security system with a defined-contribution private pension pLan. In the old pay-as-you-go arrangement, workers paid part of their wages to the government forredistribution to retirees; as workers retired, they in turn collected the state pension. In the defined-contribution system, employersdirect a set percentage of each employee's wages to a private pension fund for retirement investment; when no Longer working, eachperson controLs his own fund for support during retirement.

Experience has shown that a private pension system can improve pension provisions as weLl as encourage capital market and privatesector deveLopment. By adding to private savings, these systems can heLp finance domestic investment. The pension funds in EL Salvadorare expected, over time, to stimuLate demand for equity and long-term fixed-income instruments and add nearly $2 bilLion to the LocaLcapital market in the next 10 years.

IFC's involvement in the Salvadorian pension industry, initiated through an investment in AFP Previsi6n, a private pension fundmanagement company, wiLL heLp other capital market development initiatives in El Salvador and the rest of Central America.

Report on Operations

As recovery from of the Asia Opportunity Fund, at up to $750 million

the global financial one of the largest restructuring funds ever arranged

crisis began to take for emerging markets. The $250 million we approvedo 0 \ 0 ,<sS t;; root, the aftermath for the fund and two related facilities was the largest

in many of IFC's project approval in IFC history.

developing member To bolster the health of the IFC portfolio, now

at countries presented and in the future, the Corporation strengthened super-

A;: :f: s the Corporation vision through the creation of specialized portfolio

with major chal- divisions in investment departments and better moni-

54 lenges. The Corporation continued its financial growth, toring by field offices. In tandem, the newly established

however, even in economies suffering the worst effects Credit Review Department brought a more systematic

of the crisis, committing $3.6 billion in new investment approach to assessing risks in project analysis.

during the 1999 fiscal year ending June 30.

The people who work in, own, and operate Investment Activitiesprivate companies bore the brunt of the crisis in those IFC signed investment commitments of $3.6 billion

countries so affected, as access to international credit for 218 projects in FY99, of which $798 million

was drastically reduced. The credit shortage drove up was mobilized through loan syndications and under-

demand for IFC financing. writing. The ratio of IFC funding commitments to

IFC responded with initiatives on many fronts, total costs was 1 to 3.7. For a five-year comparisoni of

customizing its approach to local needs. We sought out investment approvals, commitments, and disburse-

new investment, especially in recently reformed sectors ments, see the table on the following page.

and in high-development-impact sectors such as finan- Geographic Distribution: IFC made investment

cial and physical infrastructure. And we worked hard to commitments to 218 projects in 79 countries in FY99,

preserve the viability of companies in our existing down from 226 projects in 73 countries in FY98. IFC

portfolio-our valued clients-through restructuring signed a commitment for the first time in Albania.

and recapitalization whenever possible. By working IFC approved 255 projects in 77 countries in

closely with business owners and managers, we devised FY99, compared with 304 projects in 83 countries in

joint responses to crisis-driven difficulties and advised FY98 (revised FY98 figure). IFC approved an invest-

them on possible protective measures. ment in one new country, St. Kitts and Nevis.

The Corporation also developed trade finance The "Extending IFC's Reach" initiative was

products that matched the needs of companies expanded to cover 20 countries and regions where

struggling to survive in the Republic of Korea and in IFC previously had only limited activity (countries

Indonesia. We played a pivotal role in the establishment listed on p. 119). Since the program's inception in

IFC OPERATIONS AND RESOURCES, FY95-99 BALANCE SHEET HIGHLIGHTS AS OF JUNE 30, 1999

('01 c1is of U.S. dotras) FY95 FY96 FY97 FY98 FY99 (-orons of U.S. do.t3l) FY95 FY96 'Y97 FY98 FY99

OPERATIONS ASSETSInvestment approvals Liquid assets 4,812 6,620 8,748 10,747 11,369Number of projects 213 264 276 304' 255 Investments 7,262 7,817 8,423 8,976 10,039

Total financing approved $5,467 8,118 6,722 5,905' 5,280 Reserve against losses (777) (876) (1,076) (1,522) (1,825)For IFC's own accouint 2,877 3.242' 3,317 3,412' 3,505 Net investments 6,485 6,941 7,347 7,454 8,214Held for others 2,590 4,876 3,405 2,493' 1,775 Derivative assets 6,251 8,138 11,400 11.944 12,289Total project costs 19,352 19,633 17,945 15,726' 15,578 Receivables and other assets 680 941 1,480 1,476 1,584Investment commitments Total Assets 18,228 22,640 28,975 31,621 33,456Total commitments signed $4,064 4,579 5,558 5,138 3,598For IFCs oxen account 2,412 2,112 2,402 2,699 2,800 LIABILITIESHeld for others 1.652 2,467 3,156 2,439 798 Borrowings outstanding 7,993 8,956 10,123 11,162 12,429Investment disbursements Derivative liabilities 5,907 8,283 12,181 12,678 13,012Tovestalmfinanc disbursedm $3,220e3,604n5,110t4,291s3,296 Pavables and other liabilities 725 1,243 1,934 2,697 2,671Total fiDancing disbursed $3,220 3,804 SllO0 4,291 3,296 Totalliabilities 14,625 18,482 24,238 26,537 28,112For IFC s own account 1,807 2,053 2,003 2,054 2,102HeLd for others 1,413 1,751 3,107 2,237 1,194 CAPITALColiianitted portfoliot Capital stock 1.875 2,076 2,229 2,337 2,350Number of firms 939 985 1,046 1,138 1,258§ Retained earnings 1,726 2,072 2,503 2,749 2,998

Other 2 10 5 (2) (4)Total committed portfolio $14,315 16,336 18,992 20,608 21,238 Total capital 3603 4,158 4,737 5,084 5,344For IFC's own account 9,461 9,844 10,512 11,448 12,917

Held for others 4,854 6,492 6,471 9,160 8,321 INCOME STATEMENT HIGHLIGHTS YEARS ENDED JUNE 30, 1999 55

RESOURCES (m-i- ons o U.S. olr FY;5 FY56 FY97 FY95 FY99CapitalizationBorrowings $7.993 8,956 10,123 11,162 12,429 Interest income and 468 521 580 583 607Paid-in capital 1,875 2,076 2,229 2,337 2,350 financial feesRetained earnings 1,726 2,071 2,503 2,749 2,998 Income from deposits 266 348 411 550 532

and securitiesNet income $188.0 345.8 431.9 245.8 249.3 Total interestincome 734 869 991 1,133 1,139

Revised figures. Charges on borrowings (394) (489) (536) (6511 (670)Income from equity 132 242 344 314 265

I Total nommjinted porrfo5io and sold fon others at r une 3t. 1999, 1998, 19ivetmntann 1996 include sceritied tars. nvestments

Provisionforlosses (162) (151) (266) (481) (333)9 tOISLOOs companiea fon ah oh tFt has comrn ttro only risk management ancon investments

Net noninterest expense (122) (125) (101) (103) (152)Effect of accouinting change 34Net income 188 346 432 246 249

September 1996, IFC has approved $1 billion in investments Loan Syndicationsin economies where difficult conditions have constrained Mobilization of additional resources from private markets is

private sector activity. We have established a field presence in a key component of IFC's operational strategy. IFC's syndi-

all but one of the countries and regions and assigned about cated loan, or B-loan, program is the Corporation's principal

50 investment staff to work on the program. direct means of mobilizing funds from external sources. As

Through June 1999, IFC approved 160 projects in lender of record, IFC extends its "umbrella" to participating

Outreach countries totaling $1 billion. Of these, 67 invest- financial institutions, arranges the loan, and coordinates the

ments totaling $68.3 million were through the Small syndication effort.

Enterprise Fund. In addition, IFC mobilized $446.2 million As a result, IFC has successfully secured financing for

from participants, and provided $12.2 million through its many borrowers with limited access to long-term project

Technical Assistance Trust Funds Program for 108 projects. funds. Bank regulatory authorities of many capital-exporting

countries have exempted IFC loan participation from

0-|-

|~~~~~~~~~~~~~~~~ - S- .- S

* -I--. S *

mandatory provisioning requirements when such provi- countries gain access, often for the first time, to the interna-

sioning is applicable, thereby enhancing IFC's ability to raise tional capital markets. The crisis in the emerging markets,

financing for companies in emerging markets. especially since the Russian default in August 1998, sharply

IFC's B-loan portfolio as of the end of FY99 was affected investor confidence. As a result, during this period

$8.2 billion in 285 projects. IFC has syndicated loans in few private sector corporate entities from developing coun-

a broad range of countries and in many sectors, including tries have been able to issue securities in international

power, utilities, transport, telecommunications, manufac- markets. Under prevailing conditions, IFC focused on advi-

turing, energy, Mining, and agribusiness and for capital sory engagements aimed at assisting portfolio companies.

market activities. During the year, IFC advised the Investment Promotion

Signings of new B-loans in FY99 totaled $0.8 billion and Development Company of Bangladesh on a private

for 40 projects. IFC approved $1.8 billion in syndicated loans placement of its equity and prospective initial public

for 39 projects in FY99, compared with $2.5 billion for offering. IFC also advised two private equity funds in the

71 projects in the previous year. Central Asia, Middle East, and North Africa region on capital

mobilization: the Peace Technology Fund for investment in

Securities Underwriting and Phacement the West Bank and Gaza and the Tuninvest Fund for invest-

IFC also mobilizes resources for its client companies through ment in Tunisian private companies. IFC is participating in

capital markets issues. Its underwriting and placement and mobilizing funds for the Asia Opportunity Fund, a $750

activities seek to help private companies from developing million private equity fund to assist corporate restructurings

in the crisis countries of Asia.

Risk Management Services infrastructure; privatization and corporate restructuring

Instruments designed to help companies manage financial work; project development facilities; investment and project-

market risks are often unavailable to corporations and banks specific advisory services; and the Foreign Investment

in the developing world. To provide access to those instruments, Advisory Service (FIAS).

IFC offers risk management services to emerging-market Financial Markets Advisory Work. In the past 28 years,

companies. Through this program, IFC educates clients on IFC has undertaken more than 900 technical assistance and

risk management techniques and enhances their creditwor- advisory assignments in the financial sector in over 100

thiness by enabling them to hedge their risks. countries and regions. Securities markets projects represent

During the past nine years, the IFC Board of Directors the core-nearly three-fifths (59 percent)-of IFC's technical

has approved 83 risk management projects, for an exposure assistance work in the financial sector. Another third (34

of $445 million for clients in 35 countries. The completed percent) is concentrated in developing the financial sector in

transactions hedged a notional amount of $1.67 billion. general and the legal and regulatory framework for leasing

In FY99, IFC approved eight risk management projects, and nonbank financial institutions. Banking projects account

including projects for clients from Bangladesh, C6te d'Ivoire, for the remainder (7 percent).

Ecuador, Korea, Mozambique, Panama, and Peru. During FY99, IFC undertook more than 100 projects in [7

These products are offered to IFC clients solely for some 50 countries and regions. Securities markets projectshedging purposes. IFC hedges its own market risk either included training programs in Vietnam, bond market initia-

through an offsetting hedge or through risk-sharing arrange- tives in South and Southeast Asia, development of a legal and

ments with entities in the international banking community. regulatory framework for Bulgaria, and design of mutualfund regulations in Jordan and in the WNlest Bank and Gaza, as

TechnicaL Assistance and Advisory Services well as advice on corpcrate governance in Chile. Legal and

Strong demand for IFC's technical assistance and advisory regulatory reforms for leasing were predominantly under-

services continued throughout FY99. During the past seven taken in the Europe region, notably in Russia, Ukraine,

years, IFC has expanded its scope to include financial sector Croatia, Moldova, Lithuania, and Poland. Insurance and

and capital market technical assistance; advisory work in housing finance projects involving market studies and legisla-

EMERGING MARKETS DATA BASEPROMOTING CAPITAL FLOWS THROUGH INFORMATION FLOWSince the 1980s, IFC has provided international financial markets with reliable and comprehensive information and statistics on developing-country stock exchanges. Using a sample of stocks in each market, the Emerging Markets Data Base calculates indexes of stock marketperformance that serve as consistent benchmarks across national boundaries and eliminate variations that make locally produced indexesdifficult to compare. These indexes include the IFC Investable indexes, tracking stocks avaiLable to foreign investors, and the IFC Globalindexes, tracking the most active stocks in their respective stock markets.

During FY99, IFC expanded its coverage of equity indexes to 51 markets with the introduction of an IFC Global Index for Saudi Arabia.The year was also notable for the first "graduation" of an IFC index market from its "emerging market" category, when Portugal was droppedon April 1, 1999.

IFC introduced a new data feature to its product lineup, the BARRA TED consensus earnings module. The module adds brokers' one-yearand two-year consensus net profits, earnings-per-share, and dividend-per-share forecasts for many IFC Index constituent companies.

Detailed descriptions of the IFC indexes can be found at the EMDB website (www.ifc.org/emdb) in the form of special announcementsand technical notes.

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tive reforms took place in all regions. Comprehensive tech- the Northeast of Brazil by advising on the establishment of

nical assistance and training in the banking scctor were the country's first state-level regulatory agency and on the

provided in Korea (Hana Bank and Kookmin Bank), Vietnam structuring of a concession for the treatment and supply of

(FEB/ACB twinning agreement), and Bangladesh (twinning bulk raw water serving the state capital. Fortaleza.

with IPDC). Bank privatization efforts were undertaken in Other transactions included the first privatization of a

Costa Rica (BICSA) and Bulgaria (Hebros Bank). transshipment container terminal in the Northeast of Brazil.

Privatization Advisory Services. IFC's Corporate Technical Assistance Trust Funds Program. IFC's devel-

Finance Services Department (CFS) provides advisory opment and operational work is supported by bilateral and

services that facilitate private sector participation in state- multilateral donors through its Technical Assistance Trust

owned and -operated businesses. CFS advises governments, Funds (TATF) Program. Technical assistance provided under

state-owned enterprises, and private companies on imple- this program includes feasibility anid prefeasibilty studies,

menting privatization transactions and creating projects that project identification studies, strengthening of the environ-

are commercially viable and that meet political and ment for private sector development, capacity building for

economic objectives. private businesses and government officials, and privatiza-

One of the five completed transactions in FY99, the tion. In FY99, for example, TAT F assisted with the operational E9privatization of Panama's state-owned electricity company, upgrade of two banks in Korea; the privatization, moderniza-

Instituto de Recursos Hidraulicos y Electrificaci6n, success- tion, and expansion of a telephone network in Honduras;

fully unbundled the sector and introduced competition. tourism sectors and a cultural and ecotourism study in Mali

Against the backdrop of the global financial crisis, the and Mauritania; and an audit of a bank in Russia.

success of this project in a relatively small country evidenced Through FY99, the donor community provided cumula-

significant investor interest. In addition to signing four new tive contributions of some $100 million to support the TATF

mandates, CFS continued its work in the state of Ceara in program, which includes a budgeting allocation from IFC's

OPERATIONS EVALUATION GROUPThe Operations Evaluation Group (OEG) was set up in 1995 as an independent evaluation unit to introduce systematic procedures, a

broader evaluative framework, and improved instruments for corporate accountability and learning. OEG, which maintains an arms-Length

relationship with IFC operations, reports through the World Bank's Director-General, Operations EvaLuation, to IFC's Board. IFC had been

evaluating its investnent operations since 1978 but on a less systematic basis.In its recent analysis of IFC investments, those approved in 1991-92, OEG found that 60 to 70 percent of these mature operations

are delivering both high development impacts and profitable returns to IFC. The 60-investment stratified random sample, which repre-

sented 30 percent of all approvals in those years, also revealed that projects in high-risk countries achieved better results than those in

low-risk countries. The 60 investments garnered their highest scores for development impacts, which include the project's environmental

sustainability and contributions to the country's private sector development, economic growth, and living standards. Environmental

sustainability, for example, was rated satisfactory or excellent in 81 percent of the cases. The analysis also looked at project and company

business success, profitability of the IFC investment, and IFCs operational effectiveness.These FY99 findings, presented in the second annual OEG review, also analyzed lessons learned and ratings patterns and made recom-

mendations to management for improved IFC performance. Under new rules promoting more openness, OEG has posted the annual reviewabstract on IFC's external website [www.ifc.org/depts/html/oeg.html].

IFC DONOR-SUPPORTED TECHNICAL ASSISTANCE PROGRAM ()Wll resources totaling $3.4 million. Sinice the 1988 inception

of the program, donors have approved more than 700 tech-

Countries nical assistance projects involving $87 million in funding.

Australia India Norway Foreign Investment Advisory Service. FIAS helps

Austria IreLand Poland developing country governments reduce barriers to foreign

Belgium Israel PortugaL direct investment and get the greatest possible benefit from

Canada Italy Spain it. Jointly operated by IFC. and IBRI) with funds also from

Denmark Japan Sweden donor countries, the FIAS team provides advice to member

c Finland Luxembourg Switzerland.2 F governments on policy, legal, regulatory, and proceduralE France Mexico United Kingdom

o Germany Netherlands United States changes that bring transparency to the investment environ-

C New Zealand ment, as well as ways to pronmote foreign direct investmenit.

Of particular importance in FY99 were projects in

Central and Eastern Europe, where FIAS provided recom-

-Institutions mcndations to 10 countries, including Armenia, Lithuania,

60 African European Union the former Yugioslav Republic of Macedonia, and Slovenia.Development Bank Inter-American T

Caribbean DeveLopment Bank FIAS works only at the request of client governments.DeveLopment Bank United Nations Development In other assignmcnts, FIAS identificd bureaucratic

European Bank for Programme impediments to privatc investment in eight comitries-Reconstruction and Other sources o IDeveLopment Bolvia, Indoncsia, Jordan, Latvia, Madagascar, Mali,

Mauritania, and the Philippines-and recommended ways to

address them.

The World Bank Group FIAS continiued to emphasize private investnment in

International Bank International Multilateral infrastructure, particularly focusing on how to attract foreignfor Reconstruction Finance Investment direct investment in these sectors. In Costa Rica, Nepal, and

and Development Corporation Guarantee Agency Zambia, FIAS teams examined ways to improve the legal and

institutional framework to facilitate large-scale infrastructure

* The World E Institutions Countries investments on a project finance basis.Bank Group $48.24 million $331.31 million The FY99 tcchnical assistance projects are described on1

$71.01 million pages 94 to 104.

Total: $450.56 miLlion

Management and Organization

IFC programs 1't, )' -itiC t S

and activities are 'ivo vice presidents for operations manage IFC's

a lm s guided by its 174 regional. industry, and advisory work: Jemal-ud-din

f7111M 11XV member countries Kassum oversees new business through the approval

through a Board process to commitment of funds; Assaad J. Jabre

of Governors supervises projects already in the portfolio as well as

and a Board of credit review and advisory operations.

Directors. Each 'I'here are seven regional investment departments:

countrv appoints Sub-Saharan Africa; East Asia and the Pacific; South

one governor and an alternate. Corporate powers are and Southeast Asia, based in New Delhi; Central Asia, 61

vested in the Board of Governors, which delegates the Nliddle East, and North Africa; Central and

most of its powvers to a board of 24 directors. The Southern Europe; Europe 11, based in Moscow; and

directors meet regularly at World BankC Group head- Latin America and the Caribbean. These departments

quarters in Washington. D).C. [FC, also based in develop strategies for member countries in their

Washington, has representatives, staff, or agents in 69 regioni and promote business, cultivate rclationships

field locations, with governments, and coordinate with other parts of

Since June 1995. lames 1). Wolfensohn, president, the W/orld Bank Group. A financial markets division in

has led the W,Vorld Bank Group, comprising the Inter- each region develops investment projects that involve

national Bank for Reconstruction and l)evelopment, financial institutions.

Interiiati(onal D)evelopment Association, NMultilateral

Investment Guarantee Agency, and Internatiolnal Peter Wloicke, Executive lVice President (frtont ceniter), and

1-inance Corporationi. Pleter Woicke, who assumed the (lft to right) Vice Presidents Assnosidj Jabre, emnat Talaat Shafik,Dorotbi, Hama[cbvi Be rrv, Birgittal lantold, Jeaial-wid-diii Kan,7sl7 did

position of executive vice president of IFC in January, C'arol E Lee. ANot presenrt: Copocuae Secretaiy Sbsenigmna Zhiang.

oversees IFC's day-to-day operations. For the first

time, the executive vice president also is a managing

(director of the WXorld Bank, in charge of its private

sector operations, and is responsible for development

of a coordinated private sector development strategy

for the W'orld Bank Group. The Management Group. a ow

which includes the six vice presidents of IFC, assists v

the executive vice president in decision making and

planning for the future. 'I'he vice president for private

sector development and infrastructure, Nemat Talaat , ¶1Shafik, reports to the executive vice president in his

capacity as a X\Vorld Bank managing director.

O)f the seven othcr departments, five specialize in partic- The Office of Principal Financial Adviser monitors the

ular in dustrial sectors worldwvide: Agribusiniess; Chemicals, impairmenit level of IFC's portfolio anid recommenlds loss

Petrochemicals, and Fertilizers; Oil, Gas, and Mining; Power; provisions and charge-offs to rnanagement. It also conducts

and Telecommunications, Transportation, and Utilities. The a higher level review of the Corporation's loss reserve recom-

five industry departments handle projects in specific areas mendations made by the Portfolio Management Units.

xvhere IFC can contribute its specialized financial and tech- 'rhe Controller's and Budgeting Department is in charge

o nical knowledgc. of the Corporation's financial statcments and accounting

The Credit Review Department provides an objective policies. It also prepares and monitors the Corporation's

oP credit assessment of IFC's investments, independent of the budgets and coordinates and develops the Managementg project origination and processing functions undertaken by Information System. It sets and monitors financial policies,

the investment departments. establishes financial forecasts, and oversees internal controls.E ''The Corporate Portfolio Management Group assesses 'T'he Corporate Planning I)epartment prepares IFC busi-

IF('s portfolio risks and activities and actively manages ness plans and long-term strategy. It manages the Technical

portfolio exposures through structuring and execution of Assistance 'ITrust Funds program and associated relationships

62 appropriate transactiOnIs. 'I'hc group also provides the with donor countries and agencies.

Corporation with the information and capabilities necessary 'The Financial Operations ULnit processes and settles all

to oversee the portfolio. investment and borrowing transactions and payments. At end

Trhe Special Operations Unit addresses problems of FY99, the unit began managing the settlement and custody of

companies in the IFC portfolio that are experiencing serious IFC's liquid asset investment and equity investment portfolios.

difficulties. Where possible, IFC helps to restructure those The Information Technology Department oversees all

companies; otherwise, the unit seeks to maximize cash corporate business systems, technology infrastructure, infor-

recovery for IF('s own account and for the accounts of mation technology training, and support.

13-loan participants. 'fhe Syndications and International Securities Group

The Corporate Finance Services Dcpartment provides fee- mobilizes financing from outside sources for investment in IFC

based advisory services on privatizations and restructurings. projects through the syndication of IFC B-loans, underwrit-

The Finanacial Markets Advisory D)epartment works with ings, private placements, and collective investment vehicles.

the regional departments to promote financial sector devel- The Treasury Department carries out the Corporation's

opinent. It provides specialized expertise to the regional market borrowings program and manages some $10 billion

departn cuits, coordinates advice to member governments, in IFC's liquid asset portfolio as well as the Corporation's

monitors emerging stock markets, and maintains the IFC assets and liabilities on its balance sheet.

Emerginig Markets Data Base.

The Foreign Investment Advisory Service is a joint venture iLe9 a Department

between lFC and 11RD). It advises member countries on ways The Legal Department, under the direction of the vice

to increase the transparency of the investment environment president and general counsel, Carol F. Lee, and deputy

through appropriate policy, legal, regulatory, and procedural general counsel, Jennifer A. Sullivan, offers policy-related

chaniges and on effective promotioln of foreign investment. advice and transactionial support to senior managemenit,

operational departments, and the financial complex. As the

chief legal officer, the vice president and general counsel

The vice president for finance and planning, Birgitta Kantola, advises on all issues arising under IFC's Articles of

serves as chief financial officer, supervising four departments, Agreement and on the conformity of proposed transactions

two units. and the Office of Principal Financial Adviser. with policies and practices.

I TIC's attorneys and legal assistants collaborate with the The Operations Evaluation Group is an independent

regional and specialized investment departments to identify unit reporting functionally to the Board of Directors through

and analyze legal and regulatory issues and to structure and the director-general of operations evaluation of the World

negotiate investment terms. They are responsible for docu- Bank. OEG is responsible for facilitating IFC's self-evalua-

mentinig all loan and equity investments as well as guarantees, tion systems. It selectively reviews IFC investment, technical

syndications, and security arrangements, in coordination with assistance and advisory operations, programs, policies, and

international counsel in selected transactions. procedures to assess results, identify lessons and recommen-

The department assists in the expansion of the range of dations for improvement, and provide independent

treasury activities, including IFC bond issues, swaps, and accountability for achievement of objectives and develop-

other derivatives, liquidity m1anagement, and securitization ment impacts. After taking a stratified random samplinig of

transactions. It also provides legal support to the Special projects reaching operational maturity, OEG conducts a

Operations Unit in negotiating problem projects and to the rigorous review using a performance rating system with

Environment I)ivision in developing and implementing standard guidelines and benchmarks. Findings are reported

environimental and social policies and procedures. annually to the Board and disseminated to IFC management

and staff to improve corporate performance. 63

Technical and Environment Department'the 'technical and Environment Department provides tech- Human Resources and Administrationnical and industry expertise for investment operations and The new vice president for human resources and administra-

reviews and monitors environmental and social compliance tion, lorothy Hamachi Berry, joined IFC midyear from the

of all IFC projects. As its mandate has broadened, IFC's World Bank. Under her direction, the department is imple-

Environment Dlivision has organized into three work units: menting the human resources aspects of IFC's "new

the Environmental and Social Review Unit, which reviews approach." This approach has two pillars-resource alloca-

and monitors the environmental and social impacts of tion tied to country strategy, and people management as a

projects to ensure compliance with IFC and host-country source of competitive advantage-both of which are criti-

requirements; the Environmental Projects Unit, which cally important if IFC is to achieve its potential contribution

develops innovative projects that address specific environ- to private sector development and economic growth.

mental concerns and acts as an executing agency for the There were 1,818 IFC employees from 118 countries on

Global Environment Facility for private sector projects; and June 30, 1999. With the Corporation's sharpened focus on

the Financial Mlarkets Environmental Services team, which direct client support, its field presence has increased signifi-

reviews, monitors, and provides technical assistance to finan- cantly, with more than 625 staff-or approximately 34

cial intermcdiaries and conducts internal and external percent of its total work force-in 69 duty stations.

environmental training programs. NWork is underway to align the Corporation with the

dynamic external business environment by improving its

Other Specialist Departments organizational flexibility and responsiveness and by strength-

The Corporate Relations Unit handles external relations, press, ening professional growth opportunities for its staff. At the

publications, and electronic communications, in addition to same time, IFC continues outreach efforts through its staff

helping implement IFEC's informiation disclosure policy. exchange program with companies and other outside organi-

The Economics Department assists the investment zations. These efforts will help the Corporation serve its

departments in reviewing the economic merits of project clients and retain its innovative edge in the marketplace.

proposals. It prepares country risk assessments and industry

studies and provides economic intelligence.

Organizational Chart BOARD OF GOVERNORS

BOARD OF DIRECTORS

Presidentf CompLianceCorporate Secretary' James D. Wolfensohn Adviser/Ombudsman2

Shcngman ZhangMMMMMMMgTyo

Executive Vice President' Vice President, Private SectorPeter V\roicke DeveLopment and Infrastructure

Nemat Talaat Shafik

Director, Operations Vice President, Human Vice President and Director, TechnicaL andEvaluation Group Resources and Administration General Counsel Environment DepartmentWilliam E. Stevenson Dorothv H. Berry Carol F. Lee Andreas M. Raczvnski

Na Director, Eccnomics

Manager, Corporate Department, ando ReLations Chief Economic Adviser Deputy General Counsel

INMark A. Constantine Guy Pierre Pfeffermann Jennifer A. Sullivana _____________ ___ __________

or

aJ Vice President, PortfoLio2_ Vice President, Management and Vice President, Finance

Investment Operations Advisory Operations and Planning

64 Jemal-ud-din Kassum Assaad J. Jabre Birgitta Kantola

Director, CentraL and Director, Corporate Chief Information Officer,Southern Europe Director, Agribusiness Finance Services Information TechnologyHarold Rosen Tei Mante Andre J, Cracco Guy-Pierre De Poerck

Director, CentraL Asia, Senior Manager,the Midd.e East, ant Director, Financial Markets Corporate PortfoLio Director, ControlLers andNorth Africa Advisory Department Management Group BudgetingMohsen A. Khalil Claudia J. Morgenstern Marc Babin Christian Grossmann

Director, Chemicals,Director, East Asia Petrochemicals, and Director, Corporate Planningand Pacific Fertilizers Director, Credit Review and Financial PolicyJaved Hamid Jean-Philippe Hal hen Paul Hinchey Nissim Ezekiel

GeneraL Manager,.

Director, OiL Gas, Foreign Investment PrincipalDirector, Europe II and Mining Advisory Service' Financial AdviserEdward Nassim Phili e Lidtard Dale R. Weigel Vasant H. Karmarkar

Director, Latin America and Director, Marketing and Manager, Special Senior Manager, Financialthe Caribbean Business Development Operations Unit Operations UnitKarl Voltaire Sumio Takeichi WNoonki Sung Simon V. Fowler

JointLy IFC and IBRD.

'Vice presidential rank;serves same roLe for MIGA. Senior Manager, Syndications

Director, South and and InternationalALso servel as managing Southeast Asia Director, Power Securities Groupdirector of the World Bank, Rashad-Rudolf Kaldanv Vivek Talvadkar Suellen L. Lazaruswith responisibility for , - - , 5

private sector deveLopment.

4World Bank vice president Director,reporting to Peter Woicke in Telecommunications. Director, Treasuryhis capacity as a managing Director, Sub-Saharan Africa Transportation, and Utilities Departmentdirector of the Bank. Cesare Calari Declan J. Duff Farida Khambata

Financial Review65

IFC earned $249 million in net income in fiscal year 1999, IFC administrative expenses increased in FY99 to allow the

above the $246 million earned in fiscal year 1998 but below Corporation to respond to the financial crisis in the emerging

the record net income of $432 million achieved in FY97. markets. Total administrative expenses rose to 2.6 percent of

The Corporation's operating result in FY99 was depressed average disbursed investment portfolio in FY99, compared

by continued provisioning of the portfolio stemming from with 2.5 percent in FY98.

the ongoing effects of the financial crises that started in Asia During FY99, IFC received $13.2 million in capital

in FY98 and subsequently affected Russia and Latin America. subscription payments from member countries under the

As a result, IFC continued to set aside new reserves against general and special capital increases approved by IFC's Board

losses at a high level in the fiscal year; the Corporation pro- of Governors in 1991 and 1992 and from special allocations

vided for $333 million in additional loss reserves in FY99 of shares. IFC's borrowings continued to keep pace with its

(compared with $481 million in FY98). This, together with growing lending activities. New borrowings in the interna-

lower realized capital gains in FY99, resulted in IFC's return tional and emerging markets totaled $4.3 billion in FY99.

on average net worth falling slightly from 5.0 percent in FY98

to 4.8 percent in FY99.

Loan portfolio performance showed a small profit of Fueled by strong demand for disbursements as private portfolio

$10 million in FY99 (after allowances for borrowing costs, capital flows fled the emerging markets early in the fiscal year,

nonaccruals, specific loss provisions, and administrative IFC's loan portfolio grew strongly in FY99. Disbursed and

expenses). This profit follows net loan portfolio income of outstanding loans (excluding quasi-equities) increased by

$1 million in FY98 stated on a comparable basis. Net income 11 percent from $6.1 billion in FY98 to $6.8 billion in FY99.

from the equity and quasi-equity portfolios-that is, the Still affected by the emerging markets' financial crisis, however,

portfolios funded from IFC's net worth-declined to $76 IFC's loan portfolio showed a small profit in FY99 of $10 mil-

million from $94 million in FY98, mainly because of sizable lion (after allowances for borrowing costs, nonaccruals, specific

loss provisions taken early in the fiscal year. Despite this loss provisions, and administrative expenses), equivalent to

downturn, the Corporation was still able to realize capital a positive return on capital employed of 0.8 percent.

gains of $166 million from sales of mature equities as well The equity and quasi-equity portfolio, IFC's second-

as dividend receipts of $99 million (compared with $217.5 largest product line after loans, also continued to grow

million and $96.5 million, respectively, in FY98). Net income strongly in FY99, increasing by 13 percent to $3.2 billion. The

from IFC's invested net worth and treasury activities continued income on this portfolio declined sharply in FY99, however,

to provide a strong, dependable source of earnings, totaling because of continued high provisioning ($178 million in

$155 million after administrative expenses in FY99, down

from $181 million in FY98 stated on a comparable basis. IFC'S SOURCES OF INCOME

New investment approvals for IFC's own account

amounted to $3.5 billion, and an additional $1.8 billion of Interest and financial fees 583.0 606.7

loan syndications was approved. The disbursed portfolio Dividends and profit participations 96.5 99.3Realized gains on equity saLes 217.5 165.9

increased from $9.0 billion in FY98 to $10.0 billion in FY99. Service fees 65.9 33.4

Deposits and securities 549.8 531.8Pension and retirement benefit income 54.1 63.6Other income 40.4 3.5

TOTAL 1,607.1 1,504.2

.Gc

¢:

I

FY99 compared with $205 million in FY98) and a substantial NET INCOME AND RETURN ON NET WORTH

66 drop in realized capital gains to $166 million in FY99, com-

pared with $217 million previously. As a result, the equity and

quasi-equity portfolio reported net income of $76 million, soo \ %

equivalent to a return on capital employed of 2.8 percent. 400 8%

Product line performance as stated is not directly comparable 300 6200 4%

to previous years as the basis for allocating borrowing costs100 2%

has changed. The new basis excludes imputed borrowing

costs for loans that are funded out of IFC's net worth. - FY99

Total provisions for losses for FY99 were $333 million, U NET INCOME - RETURN ON AVERAGE NET WORTH (%)

lower than the $481 million set aside in FY98. The resulting

accumulated reserve against losses increased, representing the sum of subscribed capital and retained earnings-was

18.2 percent of the year-end disbursed and outstanding port- 2.4 to 1, well within the limit of 4.0 to 1 prescribed by the

folio, compared with 17.0 percent in FY98. The Corporation Corporation's Articles of Agreement.

believes this level of loss provisioning to be prudent, given

the risks to investment in the current environment. Funding ManagementIn FY99, IFC borrowed $4.3 billion equivalent, which was

Ca pita L and Retained Earnings $0.2 billion more than in FY98. All funds were borrowed in

IFC's net worth consists of retained earnings and paid-in international capital markets. In FY99, IFC also repurchased

capital. Total capital subscription payments of $13.2 million and retired $139 million in outstanding debt; IFC subse-

received in FY99 brought the Corporation's paid-in capital to quently issued new debt to cover these repurchases.

$2.3 billion, while retained earnings increased by $249 mil- IFC issued securities in ten currencies, including U.S.

lion to $3.0 billion. dollars, pounds Sterling, Euros, Hong Kong dollars, Polish

During FY99, the subscription rate to IFC's 1991 general zloty, and Singapore dollars. The Singapore dollar transaction

capital increase (GCI) rose to 97.4 percent of the total allo- was IFC's inaugural transaction in that market and the first

cated shares. Cumulative payments under the GCI totaled by any nonresident borrower. This issue was a notable contin-

$949 million, 98.8 percent of the $961 million subscribed uation of IFC's practice of borrowing in emerging-market

shares. Cumulative payments for shares allocated under the currencies to assist the capital market development of its

special capital increase (SCI) totaled $118.6 million, 90.5 per- member countries.

cent of the $131 million subscribed under the SCI. The total IFC raised 31 percent of total borrowings in the U.K.

number of IFC member countries was unchanged at 174. domestic Sterling market, the first time it had accessed that

On June 30, 1999, IFC's capital adequacy ratio (paid-in market in more than a decade. In addition, following legisla-

capital, retained earnings, and adjusted general reserves com- tive changes in Italy, IFC was able to improve its access to

pared with risk-weighted assets, both on- and off-balance Italian investors and completed 13 percent of its program in

sheet) stood at 48 percent. This is well above the policy mini- that market. All borrowings were swapped into floating-rate

mum of 30 percent, defined under the capital adequacy U.S. dollars. Most loans made by IFC are denominated in

framework adopted by the Board of Directors in May 1994, U.S. dollars on a floating-rate basis. The below-LIBOR cost

and reflects the strength of IFC's capital and reserves in rela- achieved through these swaps as well as the profit generated

tion to its risk exposure. IFC's leverage ratio-which is out- through the debt repurchases contributed significantly to

standing borrowings and guarantees measured in relation to maintaining IFC's low funding cost and profitability in FY99.

Liquidity Management For management and reporting purposes, IFC's liquid

Growth in IFC's investment activities has resulted in simulta- assets are separated into three distinct portfolios. The first 67

neous growth in its liquid assets, which increased during the consists of funded liquidity, such as the proceeds of IFC's

year by $0.7 billion to $10.1 billion, a 7 percent rise. Liquid variable rate borrowings, which is invested in matching vari-

assets were held primarily in U.S. dollars (99 percent of the able rate investments pending disbursements of approved

total); most of the rest of the portfolio was held in Euros. The loans. IFC's objective is to capture a carrying gain on this

entire liquid assets portfolio generated $155 million in net portfolio with minimal exposure to market risk. This carrying

income, including $30 million in spread income from funded gain was 39 basis points during FY99, compared with 37 basis

liquidity and $126 million in total income from net worth points during FY98. The last quarter of calendar year 1998

liquidity, offset by $3 million in administrative expenses. This exhibited some of the worst market turmoil in years. Fears of

compares with $181 million during FY98, including $27 million contagion from the adverse economic developments in Asia,

in spread income from funded liquidity and $157 million in Russia, and Brazil resulted in increased volatility in interna-

total income from net worth liquidity, also offset by $3 million tional equity and debt markets and massive spread widening

in administrative expenses. in the credit market. IFC took advantage of widening spreads

IFC's liquid assets are invested in accordance with to acquire high quality (that is, AAA-rated) securities rela-

policies and standards set under the Investment Authority tively cheaply. As market spreads tightened in 1999, IFC

granted by its Board of Directors. The Authority specifies the opportunistically liquidated some of these positions and

instrument and the types of entities eligible for investment. booked profits, offsetting some of the higher costs associated

IFC is authorized to invest its liquid assets in the obligations with new market borrowings. The challenge in the coming

of highly rated governments, agencies, corporations, and year will be to sustain such strong performance from the

commercial banks. Within the Authority's framework, IFC funded liquidity portfolio.

senior management has established prudential guidelines for The second portfolio corresponds primarily to the

mnanaging the portfolio with regard to market (interest rate) Corporation's paid-in capital and accumulated earnings.

risk and credit risk. This portfolio had been managed by the IBRD treasury on

IFC's behalf During FY97, the IFC Board of Directors

approved a new policy framework proposed by IFC for the

management of this portfolio. The main outcome of theLIQUID ASSET EXPOSURE ALLOCATION initiative was to lengthen the duration of the portfolio and

r 6% to establish a new benchmark with a duration of three years

(instead of the previous 12-month benchmark). The transi-

tion to the three-year-duration benchmark started at the end

of FY97 and was completed in the second quarter of FY99.

The longer duration, coupled with a strong rally in the

U.S. Treasury market, particularly in September and October

1998, provided IFC with capital gains in the net worth liquid-

ity portfolio. In the coming fiscal year, management of the

65% net worth portfolio will be brought in-house to optimize

strategic planning and to ensure a comprehensive approach5- AAA RATED O11 AA RATED _ A RATED to the management of IFC's assets.

B

>

The third portfolio consists of borrowed variable rate matched-funding policy provides strong protection against

68 funds assigned to external managers actively managed against market risk, while credit risk is managed as described below.

a six-month U.S. dollar LIBOR index. This portfolio was ini- The net worth liquidity portfolio is funded by net worth and

tiated at the beginning of FY96, when IFC awarded a total of managed against a three-year-duration benchmark. Finally,

$205 million to five external managers. In view of the success the externally managed liquidity portfolio, funded by market

of the initial experience, the Corporation expanded this pro- borrowings, is managed by external managers with risk

gram to 10 percent of the total liquid assets portfolio. At the guidelines determined by IFC. IFC's treasury also hedges the

end of FY99, IFC had a total of $779 million under manage- market risks on IFC's loan portfolio. Loans are hedged with

ment by seven external firms, including $299 million with swaps or other liabilities that have matching currency and

three global fixed-income managers and $480 million with interest rate characteristics, and residual currency and interest

four mortgage-backed securities specialists. During FY99, the rate risks are monitored and managed on a portfolio basis.

net weighted-average performance of IFC's funds under out- Credit Risk. Credit risk in IFC's treasury arises through

side management was LIBOR plus 31 basis points after fees, the investment of the Corporation's liquid assets in sovereign

compared with LIBOR plus 27 basis points during FY98 and bonds, corporate bonds, and deposits. Credit risk is also gen-

LIBOR plus 23 basis points during FY97. IFC will continue to erated through the use of derivatives for hedging purposes. In

seek new managers to further diversify the portfolio in both particular, IFC uses swaps to create synthetic-LIBOR funding

asset class and style. and investments, to manage loan assets versus underlying

liabilities, and to hedge client risk management products.

Financial Risl Mianagement To manage credit risk, IFC sets eligibility criteria and credit

The measurement and management of financial risk in IFC's limits for its counterparties that are approved by IFC's

treasury complement the management of risks that arise Finance Committee, consisting of the executive vice president

from its investment operations, both of which are crucial to and three vice presidents. IFC also closely coordinates its

preserving the Corporation's financial strength. This risk credit policies with those of IBRD.

management function is handled by the Financial Planning To protect against deterioration in counterparties' credit-

and Policy Division to ensure the independence of this risk- worthiness after undertaking derivatives contracts, IFC has

monitoring and control function. entered into collateral agreements with a large number of

Market Risk. Market risk in the IFC treasury arises pri- swap counterparties. Under these agreements, a counterparty

marily from the liquid asset portfolio (divided into funded is required to post collateral to IFC when the netted marked-

liquidity, net worth liquidity, and externally managed liquid- to-market exposure exceeds predetermined thresholds (which

ity). In the funded liquidity portfolio, IFC minimizes expo- decline with rating). Through these arrangements, IFC is

sure to market risk by requiring that assets and liabilities be better able to manage its exposure to counterparties over

matched by currency and interest rate characteristics. This time, particularly if their credit deteriorates.

Portfolio Review

69IFC's committed portfolio at the end of fiscal year 1999 Commitments and Disbursementsincreased by 12.8 percent to $12.9 billion, from $11.5 billion The growth of new commitments reached $2.8 billion in

in FY98, of which nearly 76 percent was in loans amounting FY99, an increase from $2.7 billion in FY98. Loan commit-

to $9.8 billion and 24 percent was in equity investments ments amounted to $2.1 billion and equity commitments

amounting to $3.1 billion. In addition, IFC held and man- $693 million. New commitments were concentrated in the

aged for participants $8.3 billion in loans it had syndicated. Latin America and the Caribbean (29 percent), Europe (26

The net increase in committed portfolio was $1,469 mil- percent), and Asia (28 percent) regions. The business sectors

lion after taking into account new commitments, repayments, with the largest volume of new commitments were financial

sales, cancellations, prepayments, write-offs, and translation services with 39 percent, infrastructure with 11 percent, and

adjustments. Loan repayments totaled $0.9 billion, and cement and construction materials and general manufacturing,

$120 million in equity investments were sold or redeemed. both with 6 percent.

The total disbursed portfolio for IFC's own account Disbursements in FY99 were $2.1 billion, similar to

increased to $10.0 billion at the end of FY99, from $9.0 billion the FY98 level. Loan disbursements were $1.8 billion and

in FY98. The disbursed loan and equity portfolios grew during equity disbursements $289 million. IFC also disbursed

the fiscal year by 13 percent and 10 percent, respectively. $1.2 billion on behalf of financial institutions participating

At the end of FY99, IFC's committed portfolio included in its syndicated loans.

loan and equity investments, risk management products, and

guarantees in 1,280 companies in 112 countries. Of these com- Portfolio Managementpanies, 126 were regional financial institutions and 108 were The continuing impact of the emerging markets financial

global financial institutions or investment funds. crisis and its spread beyond Asia resulted in a further deteriora-

Most IFC investments are denominated in U.S. dollars, tion in the quality of both the loan and equity portfolios in

but the Corporation borrows in a variety of currencies to FY99. As was the case in East Asia in FY98, many companies

diversify access to funding and reduce borrowing costs. The faced serious difficulties from currency devaluations, credit

currency breakdown of the disbursed loan portfolio on June tightening, drops in share prices, and deteriorating macro-

30, 1999 is shown in the Notes to the Financial Statements. economic environments. The main challenges for IFC were

Off-balance-sheet commitments to its clients in aggregate to assist its clients while protecting its current investments.

contractual amounts for guarantees and in loan equivalent As much as possible, IFC is actively involved in alleviating

amounts for derivative products outstanding on June 30, the impact of the crisis on its clients by providing assistance

1999, amounted to $448 million for 61 clients in 33 countries. where feasible, thus enhancing the countries' business

IFC minimizes its risk exposure by entering into offsetting

swap, option, or forward contract positions with highly rated BREAKDOWN OF IFC PORTFOLIO ON JUNE 30, 1999

market counterparties, as well as by performing thorough (nmilions of U.S. dol[ars)

credit reviews of all counterparties. Total committed portfolio for IFC's account 12,916.6Loans 9,794.9Equity 3,121.7Total disbursed portfolio 10,039.3Total undisbursed portfolio 2,877.3Total committed portfolio held for participants 8,321.1

Off-batance-sheet commitments 447.8

confidence and financial stability. The Corporation has cated to the field, and local staff in resident missions have

70; assisted a number of its clients in member countries affected increasingly been assigned to supervisory tasks. IFC makes

by the crisis, rescheduling loans or restructuring investments special efforts to ensure that banks participating in IFC loans

in projects that were experiencing short- to medium-term are kept regularly informed of project developments through

liquidity problems. The Corporation has also made further the B-Loan Management Unit.

investments in fundamentally sound companies to help Operational departments evaluate projects case by case

alleviate such problems. when difficulties arise. For projects with particularly severe

As part of its supervision efforts, IFC closely monitors problems, IFC's Special Operations Unit determines appro-

compliance with investment agreements, regularly visits sites priate remedial action. In such situations, IFC seeks to nego-

to check on project status, and helps find solutions to prob- tiate agreements with all creditors and shareholders to share

lem projects. In order to strengthen portfolio supervision, the burden of a restructuring, so that problems can be

portfolio management units were created in FY99 in all but w orked out while the project continues to operate. In excep-

one of the investment departments, each under a portfolio tional cases, when the parties reach an impasse in negotia-

manager. This structure should help identify problems early tions, IFC takes all necessary and appropriate measures to

and address them in a more timely manner. The adoption of protect its interests.

a more sophisticated risk-rating system will also support this During FY99, portfolio income of $872 million on both

process. Furthermore, headquarters staff continue to be relo- equity and loans exceeded the budget estimate of $819 million.

COMMITTED PORTFOLIO FOR IFC'S OWN ACCOUNT BY SECTOR ON JUNE 30, 1999~~~~~ ,F S ;; :

$492.4Timber, PuLp and Paper $687.9

$525.0 - Textiles Cement and Construction MateriaLs

$89.8 - Social Services (Health Care, Education) $574.1

$180.0 - Oil Refining Chemicals and Petrochemicals

$205.7 - Motor Vehicles and Components $ 7 6.7(including Motorcycles) Fertilizers and

$1,057.1 ~~~~~~~~~~~~~AgricuLtural ChemicaLsMining and Extraction of

MetaLs and Other Ores

$ 533.4 _w! i 0 f ;0;00L; f Q$3,615.5

Mining and Extraction Financial Servicesof Fuel Minerals

$884.4Manufacturing

$2,129.5 ~ ~~~~~~$1,209.1 - Food and Agribusiness$2,129.5 s

Infrastructure $421.0 - Hotels and Tourism

$235.0 - Industrial and Consumer ServicesTotal: $12,916.6

IFC COMMITTED PORTFOLIO FY95-99 Reserves against losses increased to $1.8 billion in FY99,

(mittions of U.S. do[Lars) representing 18.2 percent of the disbursed portfolio, up from 71

17.0 percent in FY98. This increase resulted from $333 million. .. ........................... 12,000

in provisions for losses net of a $2.5 million currency revalua-. . .. . l . . . 10,000

.. _ _ _ * . 1 8,000 tion effect on non-U.S. dollar loss reserves and write-offs of

.. ...... .... .. . . .. ...... .. 6,000 $28.7 million. The increase in the reserves against losses takes. 4.000 into account the potential for loss on both loan and equity

the quality of 17_ . . . . _ .. . .. . . | | . 2,000 portfolios arising from the situation in Asia, Eastern Europe,

FY9A FY96 FY97 FY98 FO99 and other markets which suffered from the financial crisis,

[ ~ IFC'S OWN ACCOUNT n HELD FOR OTHERS currency devaluations, and stock market declines that have

eroded the value of equity. The loss reserves comprise specific

Mainly as a result of the financial crisis in several IFC markets, reserves for impaired investments as well as a general reserve.

the quality of the loan portfolio deteriorated during the fiscal Management determines reserves against losses on the

year. The interest collection rate decreased to 89.5 percent, basis of portfolio reviews and recommendations by the

from 91.9 percent at the end of FY98. Principal outstanding on Portfolio Management Units in the Investment Departments.

nonaccruing loans as a percentage of the disbursed loan port- For this purpose, the entire portfolio is reviewed quarterly.

folio rose significantly to 11.1 percent on June 30, 1999, from The Office of the Principal Financial Adviser, which main-

9.2 percent on June 30, 1998. During the same period, princi- tains independence from investment operations, conducts a

pal in arrears as a percentage of the disbursed loan portfolio higher-level review of the loss reserve recommendations

also increased to 5.0 percent from 3.5 percent. made by the Portfolio Management Units. The Corporation's

Following continued declines during the first part of the external auditors examine closely the recommendations, poli-

year, the estimated unrealized gains on the equity portfolio cies, and methods for determining the reserves against losses.

recovered, surpassing the level reached at the end of FY98.

There were significant improvements in Asia, although the

level was still below that at the end of FY97. Capital gains of

$166 million were realized, a decline from $217 million in

FY98, although ahead of plan estimates for the year.

Project Approvals72f ] 72 SUB-SAHARAN AFRICA 78 ASIA AND THE PACIFIC 81 CENTRAL ASIA, 84 EUROPE 88 LATIN AMERICA AND

Benin, Botswana, Burkina Bangladesh, China, India, THE MIDDLE EAST, AND Albania, Azerbaijan, Bosnia THE CARIBBEAN

Faso, Cameroon, Cape Verde, Indonesia, Republic of Korea, NORTH AFRICA and Herzegovina, Bulgaria, Argentina, Bolivia, Brazil,

Cote d'Ivoire, Ethiopia, Philippines, Sri Lanka Algeria, Arab Republic of Croatia, Czech Republic, Chile, Colombia, Costa

Ghana, Kenya, Liberia, Egypt, Jordan, Kazakhstan, Estonia, Georgia, Hungary, Rica, Ecuador, El Salvador,

Madagascar, Malawi, Mali, Kyrgyz RepubLic, Lebanon, Lithuania, FYR Macedonia, Honduras, Mexico, Nicaragua,

Mauritania, Mozambique, Morocco, Oman, Uzbekistan, Moldova, Romania, Russian Panama, Peru, St. Kitts and

Namibia, Nigeria, Senegal, West Bank and Gaza, Federation, Slovak Republic, Nevis, Trinidad and Tobago,

South Africa, Swazitand, Republic of Yemen Turkey Venezueta

Tanzania, Togo, Uganda,

Zambia, Zimbabwe

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

Sub-Saharan Africa

BENINSociete Beninoise des Assurances d'Accident, a new general risk 0.00 0.08 0.00 0.00 0.00 0.08 0.7

insurance company, was launched with assistance of this equity.

Vision +, which processes eyeglass lenses for domestic and regional 0.00 0.00 0.00 0.17 0.00 0.17 0.5

markets, will install new production equipment (AEF).

BOTSWANA

Abercrombie & Kent (Botswana) Limited will develop the 24-bed 0.82 0.00 0.00 0.00 0.00 0.82 1.6

Piajio Lodge for tourists in the Moremi Game Reserve in theOkavango Delta (AEF).

BURKINA FASO

Societe des Mines du Faso, a gold producer, will develop an 1.00 0.52 0.00 0.00 0.00 1.52 4.6underground mining and processing operation in NanmentangaProvince, designed to produce 8,500 ounces of gold per year forexport to Switzerland (AEF).

CAMEROON

Elevage Promotion Afrique, a poultry producer, will relocate, modernize, 1.00 0.00 0.00 0.00 0.00 1.00 4.0

and expand, to boost production quality and capacity (AEF).

Luna Park, a tourist village and recreation center in Obala, 0.25 0.00 0.00 0.00 0.00 0.25 0.5

will rehabilitate and enlarge 25 existing bungalows (AEF).

Societe Agro-Industrielle et Commerciale du Cameroun, a gourmet 0.00 0.00 0.39 0.00 0.00 0.39 1.2

coffee processor, will expand production fivefold within six years forthe local and export markets (AEF).

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Finandng Cost

CAPE VERDE _[

Central de Britagem Cabo Verde S.A., a new sand and gravel producer, 1.30 0.00 0.20 0.00 0.00 1.50 6.4will build a stone-crushing plant in Praia and make 12 million bricks peryear using local materials (SEF).

COTE D'IVOIRE

Banque Atlantique-C6te d'Ivoire, a commercial bank, will receive 4.28 0.00 0.00 0.00 4.28 8.57 9.4a revolving credit line.

Cinergy, S.A.-IFC agreed to enter into an interest rate swap for this 0.00 0.00 0.00 1.60 0.00 1.60 1.6FY98-approved thermal power project.

Petro Ivoire SA, a sole Ivorian-owned petroleum products distributor, 0.00 0.00 0.00 3.17 0.00 3.17 5.2will build 10 gas stations to expand its retail network to 21 stations inAbidjan and secondary cities across the country.

S.G.I. Africaine de Bourse S.A. will set up a brokerage house to trade 0.00 0.05 0.00 0.00 0.00 0.05 0.5securities in the newly established Regional Stock Exchange, which willhelp modernize the developing financial market (AEF).

Societe des Caoutchoucs de Grand Bereby, the country's first rubber 6.00 0.00 0.00 0.00 0.00 6.00 23.8producer, will develop a 5,000-hectare oil palm plantation and establishan oil extraction mill to process palm bunches.

ETHIOPIA

Sheba Tannery S.C., the first IFC investment in Ethiopia since 1967, 5.00 3.57 0.00 0.00 0.00 8.57 36.5will build an export-oriented tannery making finished leather forgloves and shoes, employing 300.

GHANAGarden Court Hotel, a planned 72-room, three-star business hotel 1.50 0.00 0.00 0.00 0.00 1.50 4.9in Accra, will cater to business people and officials of internationalorganizations (AEF).

Japan Motors Company Limited, a vehicle distributorship, will build 1.50 0.00 0.00 0.00 0.00 1.50 5.5a five-story upmarket commercial office building with showrooms andlease half the space to tenants (AEF).

PharmaCare Industries Company Limited, a toothpaste producer, will 0.40 0.00 0.00 0.00 0.00 0.40 0.7double its production of both toothpaste and collapsible tubes (AEF).

Alex-Socatrag, which provides vehicle and equipment maintenance to 1.30 0.00 0.00 0.00 0.00 1.30 2.6regional mining companies, will purchase new machinery, computerequipment, furniture, and vehicles (SEF).

KENYAAnspar Beverages Ltd. will produce and distribute carbonated 2.00 0.83 0.00 0.00 0.00 2.83 9.4soft drinks in the Nairobi and Mt. Kenya regions, under a franchiseagreement with Cadbury-Schweppes.

AEF Africa Enterprise FundSEF Sma[L Enterprise Fund

:0

a.)M (in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

74 Central Depository and Settlement Corporation Limited, Africa's first 0.00 0.18 0.00 0.00 0.00 0.18 2.0privately owned securities depository company, will provide securitiessettlement and custodial services in Kenya, and eventually in Tanzaniaand Uganda.

East Africa Reinsurance Company-IFC subscribed to this client's 0.00 0.05 0.00 0.00 0.00 0.05 0.4rights issue, from an FY94-approved equity investment, so the reinsurercan meet newly raised statutory minimum capital requirements.

Greenland Agroproducers Limited will build a packing and cold storage 0.40 0.00 0.00 0.00 0.00 0.40 1.2plant and grow, process, and prepack French beans, peas, and baby cornfor export to Europe (AEF).

Kenya Commercial Bank will receive foreign exchange term finance 30.00 0.00 0.00 0.00 0.00 30.00 30.0to on-lend to export-oriented private enterprises in Kenya.

K-Rep Bank Limited-IFC subscribed to this client's rights issue, 0.00 0.43 0.00 0.00 0.00 0.43 2.8from an FY96-approved equity investment, so the bank can meetnewly raised statutory minimum capital requirements.

Meru Park Adventure Limited will rehabilitate the 64-bed Leopard Park 0.50 0.00 0.00 0.00 0.00 0.50 1.3Lodge in Meru National Park and build a park ranger station (AEF).

Multi Hauler (EA) Limited will expand operations by acquiring 10 new 1.00 0.00 0.00 0.00 0.00 1.00 2.8prime movers and refinancing short-term local debt with a long-termloan (AEF).

National Industrial Credit Bank will provide foreign-exchange 15.00 0.00 0.00 0.00 0.00 15.00 18.0term-finance resources to be on-lent to export-oriented Kenyanprivate enterprises.

Panafrican Paper Mills (E.A.) Limited, a pulp and paper mill, 1.50 0.00 0.00 0.00 0.00 1.50 1.5restructured an FY96-approved loan into a new subordinated loan.

Transenergy Limited, a petroleum transport firm, will acquire 20 more 1.00 0.00 0.00 0.00 0.00 1.00 3.5tankers (AEF).

LIBERIALiberian Agricultural Company will acquire and rehabilitate a rubber 3.50 0.00 0.00 0.00 0.00 3.50 7.0plantation that ceased operations during the civil war. It will employ 2,000.

MADAGASCARCentre de Manerinerina S.A.R.L. was established to revamp a 19th 0.15 0.00 0.00 0.00 0.00 0.15 0.6century manor house into a conference center outside the capital,Antananarivo (AEF).

Societe Princesse Bora S.A.R.L. will establish a 30-bungalow beach 0.35 0.00 0.00 0.00 0.00 0.35 1.3hotel on Sainte Marie Island, a favorite tourist destination (AEF).

MALAWICity Lodge Limited will build a three-star, 30-room hotel 0.64 0.00 0.00 0.00 0.00 0.64 1.6designed for business travelers to Blantyre (AEF).

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Finandng Cost

MALICaisses Villageoises du Pays Dogon-Association Koro, a microfinance 0.00 0.00 0.00 0.08 0.00 0.08 0.1institution, received a guarantee facility to enable access to medium-termfunding from local banks.

Complexe Industriel du Mali will modernize and expand its existing 0.00 0.00 0.00 0.34 0.00 0.34 0.9printing facilities and add a notebook production line (SEF).

Equipbail Mali is a new leasing company that provides medium-term 0.00 0.07 0.00 0.79 0.00 0.86 0.9financial and operating leases to industry and commerce.

Imprim Color, a printer and publisher, will install a new printing press 0.00 0.00 0.00 0.41 0.00 0.41 1.2and bindery/finishing line in its new building (SEF).

Kafo Jiginew-Fd&ration des Caisses d'Epargne et de Credit de la 0.00 0.00 0.00 0.29 0.00 0.29 0.3Region Mali-Sud, a microfinance institution, received a guaranteefacility to enable access to medium-term funding from local banks.

Randgold Resources Limited-IFC subscribed to a rights issue in this 0.00 2.28 0.00 0.00 0.00 2.28 34.8gold mining company so as to maintain our current equity interest.Proceeds will fund feasibility studies, project development, andcorporate expenditure. IFC equity in Randgold was acquired througha 1997 swap of some of its equity interest in Societe Miniere de SYAMA.The original equity investment was approved in FY92.

Reseau des Caisses d'Epargne et de Credit Nyesigiso, a microfinance 0.00 0.00 0.00 0.82 0.00 0.82 0.9institution, received a guarantee facility to enable access to medium-termfunding from local banks.

MAURITANIAComplexe Touristique Lemhar S.A. will establish a seaside resort club 0.40 0.00 0.00 0.00 0.00 0.40 1.330 km north of the capital city, Nouakchott (SEF).

MOZAMBIQUE

Complexo Turistico Nautilus, Lda, will expand and upgrade its existing 0.67 0.00 0.00 0.00 0.00 0.67 1.42-star beach hotel on Wimbe Beach in Cabo Delgado. It will add 23bungalows, a swimming pool, and a game room (SEF).

Extramac, Lda, a gravel quarry operator, will reopen an old quarry and 0.42 0.00 0.00 0.00 0.00 0.42 1.1install a crushing plant (SEF).

Maragra Acucar SARL will rehabilitate its cane fields and sugar mill, 10.30 0.00 0.00 0.00 0.00 10.30 53.6which ceased operations in 1985 due to civil war.

Mozambique Aluminum S.A.R.L. (MOZAL)-IFC agreed to enter 0.00 0.00 0.00 9.00 0.00 9.00 9.0into interest rate and cross-currency swaps for this FY97-approvedaluminum smelter project.

Rodoviaria da Beira, Limitada, will expand its bus company in Beira 0.19 0.00 0.00 0.00 0.00 0.19 0.5by acquiring five new buses (SEF).

AEF Afifr. Enterpnse FundSEF S.aLI Enterpnse Fund

n0

0 c0.

(in millions of U.S. dollars)

CL ~~~~~~~~~~~~~~~~~~~~~~~~~IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Finandcng Cost

76 NAMIBIA

Pandu Ondangwa Properties (Pty) Limited will build the 90-room, 1.41 0.00 0.00 0.00 0.00 1.41 4.93-star Cresta Lodge hotel in Ondangwa (AEF).

NIGERIA

Chartered Aluminium Systems Limited, a building materials producer, 0.32 0.00 0.00 0.00 0.00 0.32 1.2will double production of roofing sheets by establishing two new plantsin Abuja and Port Harcourt (AEF).

Global Fabrics Manufacturers Limited, a producer of mattress tapes 0.32 0.00 0.00 0.00 0.00 0.32 1.3and lamp and stove wicks, will relocate, expand production, and diversifyinto curtain tapes (AEF).

Hercules Tyres Manufacturing Nigeria Limited, a truck tire importer, 1.30 0.00 0.00 0.00 0.00 1.30 3.2will establish a tire retreading plant using the "cold" process to produceretreads comparable in quality to new tires at 50% of the cost (AEF).

Hygeia Nigeria Limited, a managed care provider, will establish five 0.38 0.20 0.00 0.00 0.00 0.58 2.1model medical clinics to extend managed care coverage to corporateemployers. Hygeia will also install new medical equipment at its existingLagoon Hospital (AEF).

SENEGAL

Ciments du Sahel S.A. was established to build a cement plant near the 13.50 2.35 2.35 0.00 0.00 18.20 90.0* sponsor's limestone quarry, 30 miles west of Dakar. The output will meet

local demand and be exported to the subregion.

Sadia, a butchery, will build a second plant in a residential area of Dakar 0.00 0.00 0.00 0.14 0.00 0.14 0.3and acquire three trucks (SEF).

SOUTH AFRICA

African Life Assurance Company Limited-IFC subscribed to a rights 0.00 6.85 0.00 0.00 0.00 6.85 101.3issue of this company run by investors from previously disadvantagedgroups, from an FY95-approved equity investment.

Credit and Savings Help Bank (Cashbank)-IFC agreed to subscribe 0.00 4.51 0.00 0.00 0.00 4.51 4.5to a rights issue of this bank that serves low-income communities, froman FY98-approved equity investment, thus increasing the bank's capital.

Dargle Timber (Pty) Limited/Bulwer Timber (Pty) Limited will 0.37 0.00 0.19 0.00 0.00 0.56 1.2purchase and operate an existing sawmill in Kwazulu-Natal (AEF).

Foxtrot Meat Processors CC is expanding its meat processing plant 0.82 0.00 0.00 0.00 0.00 0.82 1.2north of Pretoria (AEF).

IHS Technologies (Pty) Limited will provide specialized computer 0.64 0.00 0.64 0.00 0.00 1.29 3.3services to medical aid societies, independent practitioner associations,and health provider organizations throughout the country (AEF).

South Africa Business Incubator Center will establish an incubator 0.00 1.00 0.00 0.00 0.00 1.00 3.0center to accommodate small-scale business ventures.

(in millions of U.S. dollars)

IFC TotaLIFC IFC Quasi- IFC Syndi- Project TotaI

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

South Africa Private Equity Fund, L.P., will establish a venture capital 0.00 35.00 0.00 0.00 0.00 35.00 350.0fund focused on the expansion and restructuring of medium-sizecompanies.

SWAZILAND

National Investment Bank of Swaziland, the country's first investment 2.50 0.75 0.00 0.00 0.00 3.25 3.5bank, will provide a broad range of investment banking products andservices in corporate finance, trade finance, and treasury and capitalmarkets.

TANZANIA

Abercrombie and Kent (Tanzania) Limited, a safari tour company, will 0.30 0.00 0.00 0.00 0.00 0.30 0.7purchase tour vehicles and camping equipment and improve its premises(AEF).

Mountain Village Lodge will expand and refurbish its 3-star, 42-room 0.90 0.00 0.00 0.00 0.00 0.90 4.4lodge 12 km from Arusha (AEF).

Musoma Fish Processors Ltd., part of the Alpha Group, will build a 1.50 0.00 0.00 0.00 0.00 1.50 4.3modern fish processing plant on Lake Victoria and diversify into highervalue added products for export (AEF).

New Arusha Hotels Limited will refurbish and upgrade its 3-star, 1.50 0.00 0.00 0.00 0.00 1.50 4.567-room hotel in Arusha (AEF).

Pallsons Consumer Industries Limited will boost production capacity 0.45 0.00 0.00 0.00 0.00 0.45 1.2by 50% of its edible oil and cake from sunflower seeds (AEF).

TOGO

West African Cement will privatize its clinker plant, rehabilitate its 4.50 1.48 0.00 0.00 0.00 5.98 19.81970s-era production line, acquire a power plant, and receive neededworking capital.

UGANDA

Gomba Fishing Industries Limited will build a new fish processing plant 1.40 0.00 0.00 0.00 0.00 1.40 5.0that meets international operational and environmental standards (AEF).

Western Highlands Creameries Limited will begin processing UHT 0.50 0.00 0.00 0.00 0.00 0.50 1.2milk as part of the expansion and modernization of its dairy plant atMbarara (AEF).

ZAMBIA

Esquire Roses Farm Limited will expand its successful rose farm from 0.45 0.00 0.00 0.00 0.00 0.45 1.82 hectares to 4.5 hectares, thereby gaining economies of scale (AEF).

Kembe Estates Limited, an established slaughterhouse operator and 1.30 0.00 0.00 0.00 0.00 1.30 3.8tanner, will renovate a former state-owned slaughterhouse in Lusaka,enlarging its slaughtering capacity and creating space for tanneryoperations (AEF).

Mpelembe Drilling Company Limited will purchase modern mining 0.70 0.00 0.30 0.00 0.00 1.00 2.8equipment to use in its contract copper mining services (AEF).

AEF Afnica Enterpri, EundSEF S..LL Ente,p6se Fund

w .:@ (in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Finandng Cost

78 Zamcell Ltd. is establishing a nationwide cellular phone network that 4.50 0.60 0.00 0.00 0.00 5.10 16.9will help upgrade the country's telecommunications infrastructure.

ZIMBABWE

Bell Medical Centers Limited will acquire new medical equipment and 0.00 0.00 0.75 0.00 0.00 0.75 1.9build wings at its two hospitals for outpatient clients, an operatingtheater, a laboratory, and other rooms (AEF).

Deraswiss Zimbabwe (Pvt) Ltd., a tanner, will expand its capacity for 0.98 0.00 0.00 0.00 0.00 0.98 3.5hides and introduce equipment for finishing leather (AEF).

Hy-Veld Holdings (Pvt) Limited and Extraction Incorporated (Pvt) 1.30 0.00 0.00 0.00 0.00 1.30 3.4Limited will build a new paprika deseeding and baling plant, install amarigold dryer and pelletizer, and build an oleoresin extraction plant(AEF).

Kariba Experience (Pvt) Ltd. will build the 18-chalet Elephant Island 1.08 0.00 0.00 0.00 0.00 1.08 2.7Tree Lodge for tourists at Lake Kariba (AEF).

Trust Merchant Bank Limited, a local indigenous wholesale bank that 10.00 2.11 0.00 0.00 0.00 12.11 25.0has gained a Portuguese technical partner as a shareholder, will broadenits range of services with this equity infusion and credit line aimed largelyat SMEs.

Regional

AFRICA REGION

African Infrastructure Fund is a 10-year, $500 million private equity 0.00 100.00 0.00 0.00 0.00 100.00 500.0fund that will invest in infrastructure and infrastructure-related projectsin Africa, including North Africa.

AIG African Infrastructure Management is the management company 0.00 0.00 0.20 0.00 0.00 0.20 1.0created to operate the African Infrastructure Fund.

Ecobank Transnational Incorporated, Africa's first indigenous banking 0.00 3.75 3.75 0.00 0.00 7.50 29.8group, will strengthen its capital base, consolidate its ownership, andexpand its network of banks in the region.

Societe de Promotion et de Participation pour la Promotion 20.00 0.00 0.00 0.00 0.00 20.00 20.0Economique, the private sector arm of the Agence Fran,aise deDeveloppement, will manage this agency line, intended to fundSMEs in countries where IFC has a limited presence.

Asia and the Pacific

BANGLADESH

Khulna Power Company Limited-IFC approved an interest-rate swap 0.00 0.00 0.00 1.30 0.00 1.30 1.3for this FY98-approved barge-mounted private power project.

CHINA

Bank of Shanghai will strengthen its capital base and institutional capacity 0.00 21.74 0.00 0.00 0.00 21.74 22.0and upgrade its operations and practices to international standards.

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

Hansom Investment Limited, a holding company, will acquire four new 0.00 16.10 0.00 0.00 0.00 16.10 64.0toll road concessions in Zhejiang and Jiangsu Provinces.

Lafarge Dujiangyan Cement in Sichuan Province will build a new 25.59 0.00 0.00 0.00 30.00 55.59 158.8plant, designed to produce 1.24 million tons of cement a year.

Shanxi International Casting Company will modernize and expand 19.00 0.00 0.00 0.00 0.00 19.00 73.3a former state-owned foundry to produce iron castings for the motorvehicle and heavy equipment industries.

INDIA

Carraro India Limited will establish a tractor transmissions unit in 10.00 0.00 0.00 0.00 0.00 10.00 33.0the Ranjangaon Industrial Estate in Pune, Maharashtra State.

Integrated Coal Mining Private Limited will develop an open-pit coal 30.00 5.00 0.00 0.00 0.00 35.00 148.6mine to produce up to 3.2 million tons a year near Sarshatali.

Moser Baer India Limited, a manufacturer of floppy diskettes, will 17.69 9.54 0.00 0.00 0.00 27.23 144.0diversify and manufacture CD-Rs (compact disk recordables), the firstproject of its kind in India.

INDONESIA

Indonesia Trade Credit Facility will provide export-oriented Indonesian 0.00 0.00 0.00 50.00 0.00 50.00 140.0companies with working capital and enhance the likelihood thatinternational banks will enter into trade finance transactions with them.

P.T. Indorama, an export-oriented producer of polyester yarns, is 30.00 3.50 0.00 0.00 0.00 33.50 33.5using this working capital to continue operating at full capacity.IFC purchased equity on the secondary market to support thiseconomically viable company during the Asian financial crisis.

KOREA, REPUBLIC OF

Bank of America has pledged $150 million in trade financing to Korean 0.00 0.00 0.00 60.00 0.00 60.00 150.0banks affected by the financial crisis. IFC will guarantee 40% of BOA'sexposure to the Korean banks.

Dae Chang Industrial Company Limited, a brass manufacturer, 7.30 7.00 8.00 0.00 9.80 32.10 60.3underwent a successful financial restructuring at the height of theeconomic crisis, with IFC support in mobilizing new long-terminvestments, including substantial equity.

Good Morning Securities Co., Ltd., one of Korea's largest securities 0.00 0.00 20.32 0.00 0.00 20.32 20.0brokerage firms, has undergone capital restructuring with IFCparticipation.

Halim & Co., Ltd., the largest and only fully integrated broiler producer 0.00 6.00 14.00 0.00 0.00 20.00 40.0in Korea, was assisted by IFC's restructuring and strengthening itsbalance sheet.

Hana Bank-IFC subscribed to a rights issue of this commercial 0.00 9.31 0.00 0.00 0.00 9.31 188.9bank, from an FY98-approved equity investment, to further supportits restructuring.

SEF Small Ente,pnse Fund

2ca.

(in millions of U.S. doLlars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

80 Honam Petrochemical Corporation, a vertically integrated petrochemical 50.0 0.00 15.00 0.00 0.00 65.00 192.4producer, will be able to refinance about $35 million of short-term debtwith IFC support.

Iljin Industries Co., Ltd., the newest player in Korea's extra high-voltage 0.00 6.00 9.00 0.00 0.00 15.00 23.7power cable market, will strengthen its capital base and reduce short-termdebt, thereby increasing competition in this sector.

Jaeil Engineering Company Limited, a medium-size manufacturer of 9.00 4.00 6.00 0.00 4.00 23.00 57.0electronic components, telecommunications equipment, and auto parts,is undergoing financial restructuring.

The Korea Forfaiting Facility-West Merchant Bank, part of a series of 0.00 0.00 0.00 20.00 0.00 20.00 50.0IFC trade finance projects in Korea, will provide a forfaiting facility toKorean commercial banks so they can guarantee the obligations ofKorean importers.

Korea French Banking Corporation-IFC will provide securitization 25.00 0.00 0.00 0.00 100.00 125.00 180.0of a U.S.-dollar-denominated lease and loan receivable portfolio andmediate a basis swap for the merchant bank.

LG Electronics Inc., formerly called Gold Star Company Limited, 0.00 1.41 0.00 0.00 0.00 1.41 155.0a longtime IFC client, can retire short-term debt and improve its capitalstructure as a result of this rights issue.

SEI-Asset Korea Management Company will establish the joint 0.00 7.98 0.00 0.00 0.00 7.98 298.5venture SEI-Asset Korea Mutual Fund to mobilize domestic savingsfor investment mainly in listed Korean stocks.

Shinmoorim Paper Manufacturing Company, Limited, has implemented 8.00 15.00 17.00 0.00 8.00 48.00 245.0a major financial restructuring and will double its coated paper productioncapacity through a state-of-the-art expansion.

PHILIPPINES

Cagayan Electric Power and Light Company, a private power distributor 16.0 0.00 6.00 0.00 0.00 22.00 37.0that serves metropolitan Cagayan de Oro, will expand its network anddraw on a larger customer base.

Thomson Ratings Philippines, a new credit rating agency, will uphold 0.00 0.08 0.00 0.00 0.00 0.08 0.5international standards through its joint venture partnership with a majorU.S. credit rating agency, Thomson Bankwatch.

United Pulp and Paper Company Inc., a large packaging-paper 20.00 0.00 10.00 0.00 0.00 30.00 102.0producer, was able to complete a comprehensive financial restructuringand commission a state-of-the-art paper machine as a result of IFC'sadvice and investment.

SRI LANKA

Aitken Spence and Company Limited, one of Sri Lanka's larger 0.00 2.70 0.00 0.00 0.00 2.70 20.0diversified groups, will be able to regain financial stability andmodernize its facilities.

Nations Trust Bank, a new commercial bank, is expected to increase 0.00 1.08 0.00 0.00 0.00 1.08 7.4competition and stimulate greater efficiency, innovation, and growthin the Sri Lankan banking sector.

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

South Asia Gateway Terminals (Private) Limited, a private consortium, 35.00 7.30 0.00 0.00 0.00 42.30 240.0 81has a 30-year BOT concession to rehabilitate and expand the berths alongone quay at the Port of Colombo.

Sri Lanka Credit Rating Agency will establish the country's first credit 0.00 0.10 0.00 0.00 0.00 0.10 0.5rating agency, thereby fostering the growth of a corporate debt marketby providing credible and timely information.

Regional

ASIA REGION

Asia Opportunity Fund L.P., a new private equity fund based in 0.00 100.00 0.00 0.00 0.00 100.00 750.0Hong Kong, will play an active role in recapitalizing and restructuringAsian companies affected by the financial crisis.

Asian Co-Investment Equity Facility will invest IFC equity along with 0.00 50.00 0.00 0.00 0.00 50.0 50.0the Asia Opportunity Fund in selected companies when more is neededthan the fund can give to make restructuring possible.

Asian Debt Facility also supplements the Asia Opportunity Fund by 100.00 0.00 0.00 0.00 0.00 100.00 100.0providing IFC loans and guarantees directly to investee companiesabout to be restructured.

ChaseAsia EquityAdvisors is the newly established management 0.00 0.10 0.00 0.00 0.00 0.10 1.0company for the Asia Opportunity Fund. IFC is nominating two staffmembers to the company.

Chase Asia Equity Partners, L.P., is the vehicle created to provide 0.00 0.01 0.00 0.00 0.00 0.01 .01a share of the carried interest in the Asia Opportunity Fund.

Central Asia, the Middle East, and North Africa

ALGERIA

Aldaph SPA, a pharmaceuticals importer and distributor, will build 7.27 1.70 0.00 0.00 6.24 15.21 50.8a pharmaceuticals production and packaging plant.

ARAB REPUBLIC OF EGYPT

Abu Soma Development Company-IFC subscribed to a rights 0.00 0.29 0.00 0.00 0.00 0.29 5.9issue of this integrated resort along Egypt's Red Sea coast, from anFY94-approved equity investment.

Allied Producers S.A.E. will expand its dairy products range and small 6.70 0.00 0.00 0.00 0.00 6.70 24.4fruit drinks product line.

Commercial International Life Insurance Company, the first private 0.00 1.77 0.00 0.00 0.00 1.77 30.0joint venture life insurance company in Egypt, will help develop financialproducts that will mobilize domestic savings and introduce newmanagement skills and practices.

Hussein Choucri Securities & Investment will expand to become a 0.00 1.40 0.00 0.00 0.00 1.40 7.8full-service investment bank, offering services such as trading of listedsecurities, underwriting, private placement of debt and equity issues,corporate finance, and fund management.

SEF S-tl Enterpnse Fu-d

(V

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Ctient/Activity Loan Equity Equity Other cations Financing Cost

82 InterGen Sidi Krir Generating Companywill develop, build, and operate 70.00 0.00 0.00 0.00 122.00 192.00 449.0

a 682.5 MW steam-generating plant near Alexandria. The plant willprovide reliable and environmentally sound power generation, utilizing

Egypt's large natural gas resources.

Orascom Projects and Touristic Development S.A.E.-IFC subscribed 0.00 0.84 0.00 0.00 0.00 0.84 21.0

to a rights issue of this integrated resort on the Red Sea coast, from anFY97-approved equity investment.

JORDAN

Jordan Life Assurance Company will be a private life insurance 0.00 0.74 0.00 0.00 0.00 0.74 5.0

company, with Muasher Group as the local sponsor and PartnerRe asexclusive reinsurer. The project will promote the life insurance market,

a relatively undeveloped sector in Jordan.

Modern Agricultural Investment Company will be established as 0.00 1.00 0.00 0.00 0.00 1.00 5.0a Jordanian-Israeli joint venture in the Jordan Valley to engage inproduction and export marketing of high-value agricultural produce.

KAZAKHSTAN

Alautransgas will renovate and modernize its liquefied petroleum gas 20.00 0.00 0.00 0.00 0.00 20.00 50.0distribution operations and attempt to bring safety standards up tointernational levels. Since the collapse of the Soviet Union, investmentin capital equipment has been negligible and LPG supplies are unreliable.

Kazakhstan Construction Company, a maker of concrete products 0.90 0.25 0.00 0.00 0.00 1.15 2.6

such as slabs and hollow blocks, will expand production and refurbishequipment (SEF).

Kazkommertsbank will lend $2.5 million to SMEs in the Karaganda 2.50 0.00 0.00 0.00 0.00 2.50 2.5region. The privatization of Ispat Karmet, a large steel plant, has createdopportunities for SMEs to provide goods and services previously

produced within the company (SEF).

Rambutya Limited Liability Partnership plans to build and operate 11.00 0.00 0.00 0.00 0.00 11.00 31.6large hypermarkets with integrated shopping malls under the nameRamstore, to fill a void in the Almaty region's underdevelopeddistribution and retail system.

TuranAlem Bank, the country's third largest bank, will increase its capital. 15.00 0.00 0.00 0.00 0.00 15.00 15.0

KYRGYZ REPUBLIC

Kyrgyz-Chinese Joint Venture Altyn-Ajydar, a corrugated cardboard 0.30 0.00 0.00 0.00 0.00 0.30 0.7and packaging-material producer, will modernize to triple its productioncapacity and improve quality (SEF).

Mashinoispytatelnaya Stantsiya (Kyrgyz MIS), a recently privatized 0.47 0.00 0.00 0.00 0.00 0.47 1.3collective farm, will purchase equipment to expand dairy processingand to improve the quality and quantity of sugar beet seed (SEF).

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

LEBANON 83Bank of Beirut and the Arab Countries S.A.L. will receive a second 12.00 0.00 0.00 0.00 0.00 12.00 12.0credit line to fund expansion of its housing finance program, a followupto an FY97 project.

Banque Saradar S.A.L. will obtain the capital resources to increase its 0.00 11.00 0.00 0.00 0.00 11.00 110.0lending activities and expand its branch network and operationsthrough mergers and acquisitions.

Byblos Bank S.A.L. will use its credit line to provide long-term project 35.00 0.00 0.00 0.00 50.00 85.00 85.0finance to SMEs, expand its housing loan portfolio, and enhancematching of its asset and liability structure.

Lebanese Leasing Company S.A.L. will provide SMEs with this 2.00 0.00 0.00 0.00 3.33 5.33 5.3much-needed alternative to traditional bank financing.

MOROCCO

Settavex, an integrated producer of denim supplying local and overseas 5.42 9.00 0.00 0.00 0.00 14.42 28.0jeanswear manufacturers, will invest in a new dyeing and finishing facilityand a new corduroy facility and modernize and expand its spinning andweaving capacity.

OMAN

Oman Orix Leasing Company SAOG-IFC subscribed to a rights 0.00 0.83 0.00 0.00 0.00 0.83 7.8issue of this leasing company to strengthen its capital base, from anFY94-approved equity investment.

UZBEKISTAN

ABN AMRO Bank Uzbekistan, Asaka Bank, and National Bank of 30.0 0.00 0.00 0.00 0.00 30.00 30.0Uzbekistan will on-lend to recently privatized or newly created SMEs.

Arsin Closed Joint Stock Company will privatize a refrigerator 12.26 1.47 0.00 0.00 0.00 13.73 76.9manufacturer and produce for the domestic and regional markets.

Elma Cheese Joint Venture is a new Uzbek-Dutch joint venture that 0.58 0.00 0.00 0.00 0.00 0.58 1.5will establish a cheese-processing plant 30 km from Tashkent (SEF).

WEST BANK AND GAZA

Arab Palestinian Storage and Cooling Co. Ltd. will set up a modern 0.20 0.00 0.00 0.00 0.00 0.20 4.9cold storage facility in the Gaza Strip for perishable food products.The facility will create jobs and help reduce food shortages in Gazaduring the off-season (SEF).

Dar Al-Shifa for the Manufacturing of Pharmaceuticals Plc. will 0.00 0.00 0.50 0.00 0.00 0.50 1.3undergo financial restructuring of an FY97-approved loan (SEF).

Jericho Motels Company Ltd., comprising a 60-room hotel, 48 1.17 0.00 0.00 0.00 0.00 1.17 7.3bungalows, a health center, restaurants, swimming pools, andrecreational facilities, will promote tourism, generate foreignexchange, and create jobs (SEF).

Palestine Mortgage and Housing Corporation, the first mortgage 15.00 4.00 0.00 0.00 0.00 19.00 72.0company established in the West Bank and Gaza, will enable Palestinianfamilies to buy their homes by replacing cash-based transactions withmortgage loans.

SEF Smatt Enterpnse Fund

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

84 Palestine Tourism Investment Company-IFC agreed to subscribe 8.00 1.35 0.00 0.00 0.00 9.35 48.0to an increase in the share capital of the company and provide a loanto build and operate a 250-key hotel in the West Bank city of Bethlehem.The hotel will be managed by an international operator.

REPUBLIC OF YEMEN

Aden Company for Silos and Mills will set up a wheat processing 12.00 0.00 0.00 0.00 0.00 12.00 48.0facility that will include a flour mill, grain silos, and bulk grain handlinginfrastructure.

Regional

CAMENA REGION

Hayat Investment Management Company will be set up to manage 0.00 0.08 0.00 0.00 0.00 0.08 0.1the Middle East North Africa Environmental Fund.

Middle East North Africa Environmental Fund will provide financing 0.00 10.00 0.00 0.00 0.00 10.00 50.0to private enterprises that are implementing environmental protectionand pollution control measures. The fund will also invest in companiesengaging in pollution control activity, renewable energy, energy efficiency,and ecotourism.

Europe

ALBANIA

Eurotech Cement, Shpk., will construct and equip a new cement 1.20 0.00 0.00 0.00 0.00 1.20 3.5bagging terminal (SEF).

FEFAD BANK will provide lending to private-sector Albanian micro 0.00 1.13 0.00 0.00 0.00 1.13 5.0and small enterprises, a sector severely underserved by Albania'sfinancial institutions (SEF).

AZERBAIJAN

Amoco Caspian Sea Finance Ltd., Early Oil Finance Company, Lukoil 100.0 0.00 0.00 0.00 100.00 200.00 1982.6Overseas Chirag Finance Ltd., Turkish Petroleum Early Oil Finance Co.Ltd., and Unocal Chirag Finance Ltd. will develop part of the offshoreChirag field in the Caspian Sea. Borrowers are special purpose affiliatesof BP Amoco PLC, Exxon Corporation, Unocal, LUKoil Joint StockCompany, and Turkiye Petrolleri A.0.

Baku Hotel Company will build a five-star hotel and office tower 17.50 0.00 0.00 0.00 0.00 17.50 39.0complex by expanding existing facilities.

BOSNIA AND HERZEGOVINA

Bosnalijek, d.d. Sarajevo, a pharmaceutical firm, will refurbish existing 0.00 0.00 2.67 0.00 0.00 2.67 5.9facilities and install new equipment to modernize and expand theproduction of solid oral drugs (SEF).

Kopex-Sarajlic, d.j.l., Srebrenik, the largest oil derivatives handler 2.50 0.00 0.00 0.00 0.00 2.50 5.6in the country, will build two modern retail fuel stations and a centralservice and distribution warehouse (SEF).

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

Lijanovici d.o.o., an integrated meat processing and slaughter operation 2.40 0.00 0.00 0.00 0.00 2.40 5.7 8

in Siroki Brijeg, will expand capacity for both functions and producemore processed meats (SEF).

The Microenterprise Bank of Bosnia and Herzegovina-IFC 0.00 0.27 0.00 0.00 0.00 0.27 1.0

subscribed to a rights issue of this bank, from an FY97-approvedequity investment, to bring the bank's paid-in capital in line withBosnian minimum capital requirements.

BULGARIA

Bulgarian American Credit Bank will on-lend long-term IFC funds 0.00 0.00 4.86 0.00 0.00 4.86 5.0

to Bulgarian SMEs so they can expand and modernize.

Bulgarian Post Bank, D.D., to be privatized through IFC support, 10.00 12.40 0.00 0.00 0.00 22.40 60.0

is expected to set the standard for subsequent bank privatizationsand modernizations throughout Bulgaria.

Celhart Stambolijski A.D., a paper producer slated for privatization, 13.90 1.50 0.00 0.00 0.00 15.40 45.8

will subsequently rehabilitate and modernize existing machinery,improve paper quality, and environmentally upgrade its manufacturingprocesses.

CROATIA

Bjelovarska Banka will use this credit line to provide loans to private 15.00 0.00 0.00 0.00 0.00 15.00 15.0

Croatian SMEs.

Croatia Capital Partnership L.P., a private equity fund focused 0.00 5.00 0.00 0.00 0.00 5.00 28.0

exclusively on Croatia, will invest in SMEs.

Trscanska Stedionica Banka d.d.-IFC subscribed to two rights issues 0.00 1.48 0.00 0.00 0.00 1.48 11.1

of this bank, from a FY96-approved equity investment, to bring thebank's paid capital in line with Croatian minimum capital requirementsand to double the bank's shareholder equity.

CZECH REPUBLICCeskoslovenska Obchodni Banka A.S., one of the Czech Republic's 0.00 75.00 0.00 0.00 0.00 75.00 75.0

main banks, will receive IFC assistance with its privatization.

ESTO NIA

A.S. Schlossle Hotel Group will expand and develop hotels in historic 4.50 0.00 1.00 0.00 0.00 5.50 15.5

cities in the Baltic region.

Aktsiaselts Eesti Uhispank, a leading Estonian bank, will provide 0.00 0.00 19.33 0.00 0.00 19.33 19.3

affordable, residential mortgages to individual homebuyers.

Estonian Industrial Leasing Ltd.-IFC subscribed to a rights issue 0.00 0.41 0.00 0.00 0.00 0.41 2.1

of this leasing company, from an FY95-approved equity investment,so the company can expand operations.

Horizon Pulp and Paper Company-Phase Two of an FY98-approved 7.20 0.00 2.00 0.00 0.00 9.20 28.2

project includes a loan and equity increase to further upgrade this kraftpaper and tissue business.

SEF SmaLI Enterpnise Fund

t0::

: a (in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/CLient/Activity Loan Equity Equity Other cations Financing Cost

86 Kunda Nordic Cement-Phase Two of an FY94-approved project 2.03 1.07 0.00 2.77 0.00 5.86 28.9includes the second-stage privatization of the company, renovationof the cement mill, construction of a cogeneration power plant,and expansion of the port.

Reval Hotel Group JSC will privatize an existing hotel and build a new 8.00 2.00 0.00 0.00 0.00 10.00 30.7one, develop a strategic plan, and undergo financial restructuring.

GEORGIAMicrofinance Bank of Georgia, the first bank in Georgia dedicated 0.00 0.74 0.00 0.00 0.00 0.74 3.7to lending to micro and small enterprises, will offer loans of up to$35,000 for working capital and equipment acquisition, with relativelyshort maturities.

Ninotsminda Oil Company will rehabilitate and develop the reserves 0.00 0.00 6.00 0.00 0.00 6.00 18.9of the Ninotsminda oil field.

TbilComBank will use its first nongovernment-guaranteed credit line . 2.00 0.00 0.00 0.00 1.00 3.00 3.0from an international financial institution to on-lend trade finance,working capital, and project finance to Georgian private enterprises.

HUNGARYMohacsi Farostlemezgyar Rt. will replace its wet process fiberboard 5.90 1.76 3.00 0.09 0.00 10.75 50.7operation with a new plant that makes medium- and high-densityfiberboard.

LITHUANIAAB Ekranas, a color-TV picture tube factory, will modernize to boost 12.80 0.00 2.20 0.00 0.00 15.00 39.5production, cut costs, raise quality, and improve environmental practices.

Vilniaus Bankas AB, IFC's first financial sector investment in Lithuania, 20.00 0.00 0.00 0.00 0.00 20.00 20.0will on-lend to corporate clients, including SMEs, and make residentialmortgage loans to individual homebuyers.

MACEDONIA, FORMER YUGOSLAV REPUBLIC OFALkaloid A.D. will develop a new pharmaceutical production facility 0.00 0.00 9.03 0.00 0.00 9.03 38.2and upgrade the existing plant.

Small Enterprise Assistance Fund-Macedonia Fund will provide SMEs 0.00 2.50 0.00 0.00 0.00 2.50 12.5with equity and quasi-equity as well as business assistance (SEF).

MOLDOVAVoxTel S.A., a telecommunications company, is establishing a 10.00 1.25 5.00 0.00 25.00 41.25 65.0nationwide cellular network to help meet the urgent need for bettertelecommunications in Moldova's emerging business community.

ROMANIAAmbro S.A., the largest producer of corrugated materials in Romania, 12.85 0.00 0.00 0.00 0.00 12.85 70.7will undergo rehabilitation and modernization.

(in millions of U.S. doltars)

IFC TotatIFC IFC Quasi- IFC Syndi- Project TotaL

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

RUSSIAN FEDERATION 87Aminex Plc-IFC contributed its pro-rata share in this private 0.00 0.12 0.00 0.00 0.00 0.12 1.1placement in an FY97-approved project, in order to further developKirtayel Oil Field.

Campina 000 will build a yogurt factory near Moscow, a viable 10.00 0.00 0.00 0.00 0.00 10.00 33.5outlet for farmers who benefit from IFC technical assistance onland privatization and farm reorganization.

CJSC Bitech-Silur Company, a closed-end joint stock company, 17.50 7.50 0.00 0.00 0.00 25.00 65.0will fully develop two existing oil fields in the oil-producing TinianPechora Basin of the Komi Republic.

Russia Leasing Company, the country's first leasing company to get IFC 3.00 0.60 0.00 0.00 0.00 3.60 12.0support, will link up with foreign technical partner Deutsche LeasingAG to provide medium-term capital to Russian SMEs and joint ventures.

SLOVAK REPUBLICBank Austria Creditanstalt Slovakia a.s. will on-lend to several recently 30.00 0.00 0.00 0.00 0.00 30.00 30.0privatized export-oriented companies to support their expansions.

EuroTel Bratislava, a.s., a cellular phone network operator, will be able 10.00 0.00 20.00 0.00 0.00 30.00 250.0to raise another $140 million in parallel long-term debt to upgrade andaccommodate new subscribers.

West Import Export Company v.o.s., a pharmaceutical import and 2.28 0.00 0.00 0.00 0.00 2.28 5.9distribution company, will expand its facilities and product inventory(SEF).

TURKEYCBS Holding A.S., producers of paints and printing inks, will reduce 5.80 0.00 0.00 0.00 0.00 5.80 5.8their short-term debt and reschedule long-term obligations throughthis restructuring.

Ege Seramik Sanayi ve Ticaret A.S., a ceramic and granite tiles maker, 18.00 5.00 0.00 0.00 0.00 23.00 52.0will refinance short-term debt and build an automated warehouse anda wall and floor tiles factory.

Finansbank, A.S., will on-lend medium-term financing for the 10.00 0.00 10.00 0.00 35.00 55.00 55.0modernization or expansion needs of private sector companies.

Guimiiusuyu HaliveYer Kaplamari Sanayi ve Ticaret A.$., the leading 9.00 0.00 3.00 0.00 0.00 12.00 31.3carpet manufacturer in Turkey, will introduce higher value-addedproducts, improve yarn quality, and achieve economies of scale, thusbecoming more competitive.

Sakosa Sabanci-Kosa Enduistriyel Iplik ve Kord Bezi Sanayi ve 24.81 0.00 0.00 0.00 25.34 50.15 108.8Ticaret A.,. will produce polyester tire cord yarn and HMLS polyestertire cord fabric to supply the world's three largest tire makers.

TEB Finansal Kiralama A.S., a leasing company, will make medium-term 5.00 0.00 0.00 0.00 0.00 5.00 5.0leases to private SMEs for their modernization or expansion.

SEF 5matt Enterpise Fund

.- '

du (in millions of U.S. doUars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

88 Trakya Cam Sanayii A.S.-IFC subscribed to a rights issue of this 0.00 0.67 0.00 0.00 0.00 0.67 23.0

expanding company, from an FY79-approved equity investment.

Turk Ekonomi Bankasi A.S. will on-lend this credit line as medium-term 15.00 0.00 0.00 0.00 25.00 40.00 40.0loans to private enterprises, including SMEs.

Unye Cimento Sanayi ve Ticaret A.S. will increase its clinker capacity, .25.00 0.00 0.00 0.00 0.00 25.00 89.4reduce production costs, and improve environmental practices.

Uzel Makina Sanayii A.S., Turkey's largest producer of agricultural 20.00 0.00 0.00 0.00 15.00 35.00 98.0tractors, diesel engines, and automotive parts, will relocate its factory,expand capacity, improve productivity, and promote exports.

Regional

EUROPE REGION

ABC Medicover Holdings B.V. will expand the existing Medicover 5.00 0.00 2.00 0.00 0.00 7.00 22.0managed-care operations in Central and Southern Europe byestablishing and operating an expanded network of outpatient clinics.

EASTERN EUROPE

Intra-Regional Trade Enhancement Facility (IRTEF)-Dalrybbank- 0.23 0.00 0.00 0.00 0.00 0.23 0.2IFC restructured amounts owed under IRTEF, a project approved in FY96.

EUROPE REGION

Small Enterprise Assistance Fund-Central and Eastern Europe Growth 0.00 5.00 0.00 0.00 0.00 5.00 30.0Fund will make equity and equity-related investments in SMEs inCentral and Eastern Europe.

Latin America and the Caribbean

ARGENTINA

AcindarlndustriaArgentinadeAceros,S.A.,Argentina's leading nonflat 50.00 0.00 0.00 0.00 25.00 - 75.00 316.0steel producer, will restructure and modernize its facilities.

American Plast S.A., a leading maker of rigid plastic packaging, will 0.00 0.35 0.00 10.00 0.00 10.35 10.4modernize operations, relocate to a new site, and diversify intosemi-rigid packaging.

Banco de Galicia y Buenos Aires, S.A., received a syndicated credit 50.00 0.00 0.00 0.00 275.00 325.00 325.0facility to provide longer term financing to middle market companiesand, separately, received an increase to an existing loan.

Banco del Suquia, a C6rdoba-based regional bank, will use its syndicated 5.00 0.00 0.00 0.00 0.00 5.00 5.0credit line to support SMEs.

Banco General de Negocios S.A., a private merchant bank, will enhance 0.00 0.00 33.00 0.00 0.00 33.00 33.0its capital structure for bank acquisitions, including privatizations, andmove into retail banking.

Bio Pork S.A., a greenfield integrated pig rearing and slaughtering 5.20 0.00 2.00 0.00 5.00 12.20 31.0operation, will produce hogs and carcasses for sale in the local market.

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Finandng Cost

Concesiones y Construcciones de Infraestructura S.A., which builds 0.00 20.00 20.00 0.00 0.00 40.00 217.0 89and operates private toll roads in Argentina, will expand its activitiesto other Latin American countries, creating efficient, safe, and cost-effective transport networks.

Correo Argentino will operate the world's first fully privatized national 63.00 6.82 5.18 0.00 54.00 129.00 344.4postal service, investing $344.4 million to transform the company intoa cost-efficient provider in a deregulated market.

Juan Minetti, S.A., the country's largest cement producer, will expand 30.00 0.00 14.00 0.00 70.00 114.00 180.0its production capacity and build a clinker grinding plant in Campana.

Neuquen Basin-IFC subscribed to a rights issue in this FY96-approved 0.00 5.00 0.00 0.00 0.00 5.00 5.0project, an unincoporated joint venture with Petrolera Argentina SanJorge S.A., an oil producer in the Neuquen Basin.

S.A. San Miguel A.G.I.C.I. y E, an agribusiness company, will rehabilitate 12.10 0.00 0.00 0.00 0.00 12.10 28.0and expand its lemon production and processing operations.

Unisoy S.A. will build and operate a soy protein production plant with 5.00 0.00 2.00 0.00 4.00 11.00 28.0a variety of soy products.

Universidad Torcuato Di Tella, a private university, will renovate its 9.00 0.00 0.00 0.00 0.00 9.00 25.0building in Buenos Aires and offer more scholarships to financiallyneedy applicants.

BOLIVIA

Aguas del Illimani S.A. holds a concession to provide water and 15.00 1.00 0.00 0.00 0.00 16.00 68.2sewerage services in La Paz and El Alto. The company will use thefinancing for capital expenditures for 5 years, including 70,000 waterand 38,000 sewerage connections.

Caja Los Andes S.A. will receive a $2 million credit line to expand its 2.00 0.00 0.00 0.00 0.00 2.00 2.0market-based funding and support its microlending activities.

Electropaz S.A., a private electricity distributor in La Paz and El Alto, 25.00 0.00 0.00 0.00 0.00 25.00 40.0will improve and expand its distribution system, which currently carries35% of the country's power.

Petrobras Bolivia S.A. will develop natural gas fields in the San Alberto 15.00 0.00 15.00 0.00 30.00 60.00 95.0and San Antonio blocks in southern Bolivia to produce gas for theBolivia-Brazil pipeline.

BRAZIL

Companhia Brasileira de Securitizacao, a new securitization company, 0.00 7.50 0.00 0.00 0.00 7.50 66.6will develop a secondary market for home mortgages and mortgage-backed securities.

Concessionariado SistemaAnhangiuera-Bandeirantes S.A. will 35.00 0.00 0.00 0.00 46.00 81.00 514.3rehabilitate the Anhanguera and Bandeirantes highways near Sao Paulo,extend the Bandeirantes route by another 78.5 km, and add three tollplazas.

SEF Small Enterprise Fund

0

t0: :.@; (in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

90 Innova SA will install a styrene unit and a polystyrene unit in 20.00 5.00 0.00 0.00 160.00 185.00 288.5

Rio Grande do Sul and acquire an existing ethylbenzene plant to

produce the feedstock.

Innovative Health Services, a holding company, will invest in small, 0.00 0.00 6.25 0.00 0.00 6.25 25.0

start-up health care service companies.

Joaquim Oliveira S.A. Participacoes, a large white rice processor, 13.00 0.00 7.00 0.00 0.00 20.00 87.1

will increase efficiency and capacity by upgrading the facility.

Maximiliano Gaidzinski S.A.-Indistria de Azulejos Eliane, a leading 32.00 0.00 13.00 0.00 0.00 45.00 120.0

maker of ceramic tiles, will restructure its finances, expand capacity,

and build a state-of-the-art wall mosaic tile facility.

Minera,6es Brasileiras Reunidas S.A. will develop new iron ore mines 20.00 0.00 5.00 0.00 115.00 140.00 342.0

to replace its existing ones, build roads, and expand its rail-loading

facilities.

Vulcabras do Nordeste S.A., an athletic shoe manufacturer, is relocating 20.00 0.00 0.00 0.00 0.00 20.00 92.7

to the Northeast. The company will modernize and expand its facilities

in order to compete with imports.

Wiest S.A., a steel pipe and tube manufacturer in Pernambuco, will 9.00 0.00 8.00 0.00 0.00 17.00 50.6

modernize and expand its capacity to make automotive exhaust systems,

including an aftermarket system.

CHILECB Transporte e Infraestructura S.A. (CBTI), a holding company, 0.00 0.00 2.00 0.00 0.00 2.00 2.0

will restructure and strengthen the shareholding structure in

CB Transportes S.A.

CB Transportes S.A. will acquire railroads and develop related business 0.00 9.88 0.00 0.00 0.00 9.88 45.4

lines such as equipment leasing, transportation logistics, intermodal

services, warehousing, and ports. IFC approved an equity investment

and later subscribed to a rights issue.

Minera Escondida Limitada, a mining company, will receive a corporate 0.00 0.00 25.00 0.00 0.00 25.00 25.0

subordinated loan.

COLOMBIA

Compainia Suramericana de Arrendamiento Operativo S.A., a joint 0.00 5.10 0.00 0.00 0.00 5.10 20.8

venture with Mitsubishi and Suleasing, will become the first leasing

company devoted exclusively to operating leasing in Colombia.

Corporaci6n Financiera Nacional y Suramericana, S.A., will receive 25.00 0.00 25.00 0.00 0,00 50.00 50.0

a capital increase and 10-year revolving credit facility to strengthen

its capital and asset/liability structure.

Harken de Colombia will develop the Bolivar Block in the Magdalena 20.00 0.00 10.00 0.00 25.00 55.00 158.0

Valley, drilling the first horizontal underbalanced oil wells in Colombia.

(in millions of U.S. dollars)

IFC TotaLIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

COSTA RICA

Corporaci6n de Supermercados Unidos S.A., the largest supermarket 30.00 10.00 0.00 0.00 0.00 40.00 249.0chain in Costa Rica, is implementing an extensive five-year expansionto open 250 stores in Costa Rica, the Dominican Republic, El Salvador,Honduras, Nicaragua, and Panama.

ECUADOR

Concesionaria DHM S.A. entered into an interest rate swap upon 0.00 0.00 0.00 1.40 0.00 1.40 1.4the disbursement of its FY98-approved loans for a toll road.

Ecuacobre-FV S.A. will expand its capacity for manufacturing 5.00 0.00 4.00 0.00 0.00 9.00 17.0bathroom and kitchen fixtures.

La Universal, S.A., Ecuador's leading confectionery and food 8.20 5.00 0.00 0.40 12.00 25.60 36.4manufacturer, will upgrade its plant to boost capacity and efficiency.restructure existing short-term debt, and enter into an interest rate swap.

EL SALVADOR

AFP Previsi6n, S.A., an FY98-approved project to develop a private 0.00 0.20 0.00 0.00 0.00 0.20 0.2pension fund management company, will receive additional equity.

Implementos Agricolas Centroamericanos, S.A., an FY97-approved 0.25 0.20 0.00 0.00 0.00 0.45 1.5project to modernize an agricultural hand tools maker, will receivea loan increase to restructure short-term debt (SEF).

HONDURAS

Celtel Telefonia Celular S.A., an analog cellular telephone network 5.00 0.00 5.00 0.00 15.00 25.00 46.3operator, will expand in Tegucigalpa and San Pedro Sula, add coverageto the corridor between them, and refinance existing debt.

Grupo Granjas Marinas S.A. de C.V., the country's largest shrimp 6.00 0.00 0.00 0.00 0.00 6.00 18.7producer, will launch a reconstruction and expansion program followingthe devastation suffered during Hurricane Mitch.

MEXICOBanco Nacional de Mexico S.A. received a loan increase for an 50.00 0.00 0.00 0.00 0.00 50.00 50.0FY96-approved project that on-lends to SMEs.

Baring Mexico Private Equity Fund L.P. and Baring Private Equity 0.00 15.97 0.00 0.00 0.00 15.97 23.6Partners (Mexico) S.C. will assist Mexican SMEs by offering them riskcapital, management resources, and expert advice on strategy andoperations.

Grupo Aceros Corsa, S.A. de C.V., which makes steel sections and bars 13.00 3.00 0.00 0.00 0.00 16.00 32.8for the light construction industry, is expanding and modernizing toreplace a steel furnace with a new state-of-the-art electric arc furnaceand installing a continuous rolling mini-mill.

SEF Smatt Ente,pnse F-nd

(in miLlions of U.S. dollars)

IFC TotatIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost

92 Grupo Posadas, S.A. de C.V., Latin America's largest hotel operator, 25.00. 15.00 10.00 1.40 35.00 86.40 185.6will refinance debt and expand operations in Argentina, Belize, Brazil,

and Mexico.

Mexplus Puertos S.A. de C.V. undertook a capital increase for 0.00 1.50 0.00 0.00 0.00 1.50 6.0

its mineral and grains terminal located at Altamira.

Tenedora Nemak, S.A. de C.V.-IFC agreed to subscribe to a rights 0.00 0.00 0.70 0.00 0.00 0.70 20.7

issue of this manufacturer of aluminum cylinder heads for vehicles,

from an FY96-approved equity investment.

NICARAGUA

Distribuidora Cesar Guerrero S.A. will build a new warehouse 1.00 0.00 0.00 0.00 0.00 1.00 2.4

and offices to expand its wholesale pharmaceutical distribution

operations and upgrade its generic drugs production plant (SEF).

PANAMA

Banco del Istmo, S.A. (Banistmo), Panama's second largest privately 20.00 0.00 0.00 1.00 30.00 51.00 65.0

owned general license bank, will use loan proceeds to improve the

maturity structure of its balance sheet.

Panama Canal Railway Company will rebuild, modernize, and operate 15.00 5.00 0.00 0.00 30.00 50.00 75.0

its 47-mile trans-isthmus rail line to transport containers between ports

on the Pacific and Atlantic coasts.

Suleasing Infrastructure S.A., formerly Suleasing Panama, will 20.00 5.00 0 00 0.00 40.00 65.00 65.0

focus on providing leasing services to infrastructure projects.

PERUAgraria El Escorial S.A., a second-tier dairy and juice company, will 3.50 0.00 3.50 2.00 0.00 9.00 20.0

restructure debt, set up a risk management facility, and enter the new

UHT milk and juice markets.

Alicorp S.A., a leading food company and market leader in edible oils, 20.00 0.00 20.00 0.00 40.00 80.00 138.8

soaps, wheat, flour, pasta, and crackers, will carry out a modernization

and expansion program.

Minera Yanacocha S.A. will develop an open-pit gold mine, build a leach 30.00 0.00 0.00 0.00 80.00 110.00 121.0

pad, and expand its existing Cerro Yanacocha gold ore processing plant.

Ransa Comercial S.A. will expand its storage and transport facilities 10.00 0.00 0.00 0.00 0.00 10.00 20.0

of agricultural, industrial, and consumer products.

ST. KITTS AND NEVIS

S.L. Horsford & Company Limited will restructure debt, build a new 6.00 0.00 0.00 0.00 0.00 6.00 12.5

full-service supermarket in Nevis, and consolidate existing hardware

and building materials operations in St. Kitts.

(in millions of U.S. dollars)

IFC TotalIFC IFC Quasi- IFC Syndi- Project Total

Region/Country/Client/Activity Loan Equity Equity Other cations Financing Cost.

TRINIDAD AND TOBAGO 93Messer Trinidad & Tobago Limited will build and operate three 21.00 0.00 0.00 0.00 30.00 51.00 88.0production units to produce oxygen, nitrogen, and hydrogen.

VENEZUELA

Ceras de Venezuela Ceraven, C.A., will build a new factory to produce 15.00 0.00 0.00 0.00 25.00 40.00 67.6specialty waxes, used primarily in the making of candles and packaging.

Electricidad de Caracas S.A.C.A., a vertically integrated private 40.00 0.00 0.00 0.00 35.00 75.00 100.0electrical utility serving Caracas, will rehabilitate its distributionand transmission systems.

Propileno de Falc6n, C. A. (Profalca), will build a facility to produce 24.00 0.00 0.00 00.0 31.00 55.00 102.0polymer-grade propylene, a feedstock for polypropylene and otherpetrochemicals.

CENTRAL AMERICA

Energia Global International, Limited, an IPP developer, 0.00 5.00 10.00 0.00 0.00 15.00 15.0will launch, own, and operate small and medium renewableenergy and cogeneration power plants in Central America.

Wortd

WORLDSolar Development Co. is a specialized investment fund with a technical 0.00 6.00 0.00 0.00 0.00 6.00 50.0assistance component designed to promote the use of solar photovoltaicsystems in off-grid applications in developing countries. IFC approveda grant for business development services and an equity investment inthe fund.

SEF S-11( Enteprpns F,,nd

4 0 000 050 Tech0nical.Assstnce &Advsory0 Project94 94 SUB-SAHARAN AFRICA 96 ASIA AND THE PACIFIC 99 CENTRAL ASIA, 100 EUROPE 103 LATIN AMERICA AND

Cameroon, Chad, Eritrea, Bangladesh, Cambodia, THE MIDDLE EAST, AND Armenia, Azerbaijan, Belarus, THE CARIBBEAN

Ethiopia, Ghana, Kenya, China, Fiji, India, Indonesia, NORTH AFRICA Bosnia and Herzegovina, Bolivia, Brazil, Chile,Madagascar, Malawi, Mali, Republic of Korea, Malaysia, Arab Republic of Egypt, Bulgaria, Croatia, Czech Colombia, Costa Rica,Mauritania, Mauritius, Micronesia, Mongolia, Nepal, Jordan, Kyrgyz Republic, Republic, Estonia, Georgia, Ecuador, EL Salvador,Mozambique, Namibia, Palau, Philippines, Samoa, Lebanon, Morocco, Pakistan, Hungary, Latvia, Lithuania, Guatemala, Guyana, Haiti,Senegal, South Africa, Sri Lanka, Thailand, Vietnam Syria, Tajikistan, West Bank FYR of Macedonia, Moldova, Mexico, Nicaragua, Panama,Tanzania, Uganda, Zambia and Gaza, Republic of Yemen Romania, Russian Federation, Peru, Venezueta

Slovak Republic, Stovenia,Ukraine

Region/Country Purpose Description

Sub-Saharan AfricaCameroon Infrastructure Advised on reform of the electricity sector and privatization of the national electric

Privatization utility, SONEL (CFS).

Cameroon/Chad Project Preparation Conducted an environmental and documentation review of an oil field and pipeline

development project (TATF).

Eritrea Financial Sector Conducted feasibility study on establishment of the country's first private commercial

bank (FM & TATF).

Financial Sector Advised on financial sector development (FM & TATF).

Sector Study Undertook a comprehensive sector and project feasibility study for quarrying,

polishing, and marketing minerals (TATF).

Ethiopia Financial Sector Assisted in strengthening the institutional and operational capabilities of selected

local commercial banks in Ethiopia (FM & TATF).

Financial Sector Advised on financial sector development (TATF).

Ghana Financial Sector Assisted in a diagnostic study to evaluate the prospects of resuscitating the life

insurance sector. Introduced a reputable technical partner (FM & TATF).

Kenya Education Advised on the expansion and upgrading of Evelyn College of Design, including

preparation of a business plan (TATF).

Financial Sector Provided technical assistance to develop a legal and regulatory framework

for leasing (FM).

Financial Sector Helped the Nairobi Stock Exchange to establish a central depository system (FM).

Region/Country Purpose Description

Madagascar Environment Approved a feasibility study on development of a chain of small lodges in areasof interest to ecotourists (TATF).

FDI Prepared an assessment of administrative barriers to investment (FIAS).

Malawi Financial Sector Assisted in the development of a stock exchange in Malawi (FM).

Financial Sector Assisted in the establishment of the first private housing finance institution byintroducing a technical partner and advising authorities on appropriate regulatoryand legislative framework (FM).

Mali FDI Conducted a study of administrative barriers to investment (FIAS).

Financial Sector Assisted three microfinance institutions, including Caisses Villageoises du PaysDogon (CVECA), in establishing adequate accounting and reporting procedures,and funded attorneys who produced legal opinions so that IFC could extendguarantees (FM & TATF).

Mali/Mauritania Sector Study Funded study of tourism sectors, including ecotourism (TATF).

Mauritania FDI Completed a study of administrative barriers to investment and the implementationof the investment law (FIAS).

Mauritius Financial Sector Evaluated the potential market and regulatory framework necessary to establishthe first private housing/mortgage finance company (FM & TATF).

Namibia Sector Study Undertook a comprehensive sector and project feasibility study for cotton ginning(TATF).

Senegal FDI Conducted a study of administrative barriers to investment (FIAS).

Private Infrastructure Advised the gpvernment on a transaction to transport bulk water to metropolitanDakar to help meet the demand for potable water (CFS).

South Africa Financial Sector Approved a study on the technical attributes and market for eMerge, a new softwarefor microlenders, credit cooperatives, and small banks (TATF).

Infrastructure Advised Durban Solid Waste, a state-owned utility, on evaluating different optionsPrivatization for municipal waste disposal (CFS).

CFS Corporate Finance Services department FIAS Foreign lnvestment Advisory Service SME Small and medium enterpnseFDI Foreign direct investment FM Regionat Financial Markets divisions and TATF Technicat Assistance Trust Funds

Financial Markets Advisory Department

Ry(; V T a

F.4-'gT

zeanAC:

U,S:F

lA i t n f i s n t

Region/Country Purpose on hdesropton e aiiyopin TT

96 Zanzaia FDI Coampleed ah revaiew e of Zanziba'sdatigftrig investment la ind ifasecond ureve oFIA

WetAnzaica's inestmentl pnsromotio cmagncbyandca isprponsedrstrtgcpa (FMIASAT).

Financial Sector Assised in thvie estblshent ofsithne firs privateg horousingovfinance institution ty

and legisatbivue, framework, (F Zm). F TT

Uganda ~~~~infanilStrcture Advisted on the privaeioatint of Ugnandial Teectoms imEitred, Etheaiopaanal oamiuPrivatzationtelecMmunicATioscopn (F TT)

Asia: an h aii

ProjectPrparationponducted tecniclandgmet cenvironmentials reiewmngeet and stakeofeonutraincyg

on hydopwe facility options DeATFti

Z6 ambaia FDI Examineed th modiies of faciitating drforig investment ia nd ifastructureve (fIA)

AfricaRegionalFinancial Sectonded rans aisert eaplantion e cyand recti apraisae forestrhepuric plano A.

Financial Sector Assgsred o the exeabtli assheta nche private d oring coat fgnance cstptaiiTbyinuzo MozambiqueiTnz couany mFis ( ta. & TATF).

ProeFinancial Sector Assisted incthe dnelopma eonmtofinanal seets in ErtrEaD, Ehiop cosula mozamqe

institutican udregoional insransfrato frompayb loanlG tpnor aF comrca bAnk)

(FM & TATF).

Asia and the PacificBangladesh FDI Helped Industrial Promotion and Development Company strengthen its capabilities

in portfolio management, credit appraisals, risk management, and staff training(TATF).

Financial Advised fertilizer company on equity injection and debt restructuring plan.Restructuring

Financial Sector Assessed the viability of launching a private sector mutual fund (FM & TATF).

Financial Sector Assisted the Bangladesh Securities and Exchange Commission with feasibilitystudy on establishing the country's first credit rating agency (FM & TATF).

Cambodia Financial Sector Assessed the information technology needs of ACLEDA, a successful microfinanceinstitution undergoing transformation from an NGO to a commercial bank(FM & TATF).

Region/Country Purpose Description

China FDI Completed work on establishing a system for collecting FDI data (FIAS).

FDI Examined the legal and institutional framework for foreign investment in thecountry's infrastructure (FIAS).

Financial Sector Provided capacity-building assistance to CIRC, China's insurance industrysupervisory agency (FM & TATF).

Financial Sector Provided institutional strengthening assistance to Qinghai Tinhtic Trust &Investment Co. Ltd. so that it can provide investment banking services toclients in western China (FM & TATF).

Privatization Advised the Leshan municipal government (Sichuan Province) on restructuringthe government's shareholding in a cement company (CFS & TATF).

Fiji Project Preparation Upgraded production management software for a furniture company (TATF).

India Infrastructure Advised the state of Goa on structuring the privatization of its powerPrivatization distribution company (CFS).

Indonesia FDI Examined the various permits and licenses required to establish foreign-ownedenterprises (FIAS).

Financial Sector Developed a deeper understanding of the Indonesian trade finance situation;devised and evaluated a viable trade enhancement facility structure; and promotedthe proposed facility to multilateral, bilateral, and international financial institutionsand potential clients (FM & TATF).

Republic of Korea Financial Sector Provided support for operational upgrade of Hana Bank, a private commercialbank, in line with international best practices (FM & TATF).

Financial Sector Reviewed housing finance sector and helped establish a private mortgagesecuritization company (FM & TATF).

Financial Sector Approved assistance for leasing industry through restructuring of one leasing firmand establishment of another (FM & TATF).

Financial Sector Provided support for operational upgrade of Kookmin Bank, formerly Korea LongTerm Credit Bank, a commercial bank (FM & TATF).

Micronesia FDI Assisted in the development of state FDI legislation (FIAS).

CFS Corporate Finance Servics department FIAS Foreign Investment Advisory Service SME Smatt and medium enterpriseFDI Foreign direct investment FM Regional Financial Markets divisions aed TATF Technical Assistance Trust Funds

Financiat Markets Advisory Department

Region/Country Purpose Description

97 8 Mongolia FDI Assisted the imiplementatio n of an investment promotion strategy as followup

to a previous project (FIAS).

Nepal FDI Examined the legal and institutional framework for FDJ in the country'sinfrastructure (FIAS).

Financial Sector Conducted a regulatory review of draft leasing legislation (FM & TATF).

Palau FDI Prepared a diagnostic assessment of the country's foreign investment climate (FIAS).

Philippines FDI Identified impediments to foreign investment at the local government levelin Mindanao and examined possible remedies (FIAS).

Financial Sector Approved a project to assist in the establishment of an institutional strengtheningprogram for a local government unit as part of an effort to develop the local debtmarket (FM & '1ATKF).

Financial Sector Approved a project to help establish a financial institution that would providecooperative financing for rural electric utilities (FM & TATF).

Private Infrastructure Advised on structuring a BOT project to provide 15 percent of Manila'sdrinking water (CFS).

Sector Study Assessed private investment opportunities in the health care sector (TATF).

Samoa FDI Evaluated the investment incentive regime (FIAS).

Project Preparation Provided supplemental funding for construction oversight of Samoa's first privatesector hospital (TATF).

Sector Study Demonstrated commercial viability of local private aquaculture industry (TATF).

Sri Lanka Financial Sector Reviewed and advised on regulations and institutions required for the developmentof the debt securities market (TATF).

Thailand FDI Arranged a seminar for the government on the impact of WTO rules on FDIpromotion (FIAS).

Financial Sector Approved a study to identify viable strategies for the development of trade finance

markets (FM & TATF).

Region/Country Purpose Description

Vietnam Equitization Equitization, a Vietnamese concept meaning conversion of state-owned enterprises 99into shareholding companies, is the focus of an 18-month pilot project in Haiphong.The goal is to set up a system for auctioning off shares in 53 local companies. In arelated project, published a handbook and training materials, and sponsored seminarsto promote equitization in Hanoi, Haiphong, and six other cities (TATF).

FDI Examined impediments to the establishment and operation of foreign investmentsin Vietnam (FIAS).

Asia/Regional Financial Sector Conducted research studies on local debt markets in Bangladesh, India, Nepal, andSri Lanka, including the legal/regulatory environment, in preparation for the SouthAsia Symposium on Local Debt Market Development (FM & TATF).

Sector Study Reviewed the investment potential of paper-packaging sector in East Asia (TATF).

Sector Study Reviewed investment potential of.home appliance sector throughoutSoutheast Asia (TATF).

Central Asia, the Middle East, and North AfricaArab Republic of Egypt FDI Helped develop an FDI database and a general investment promotion strategy (FIAS).

Financial Sector Assessed constraints on development of bond market (TATF).

Jordan FDI Conducted a review of administrative barriers to foreign investment in Jordan (FIAS).

Financial Sector Assisted in drafting new primary legislation for the insurance sector (FM & TATF).

Financial Sector Provided advice on regulations regarding mutual funds (FM).

Kyrgyz Republic FDI Conducted a diagnostic update of the foreign investment environment, revieweddraft foreign investment laws, and provided advice on implementing previousrecommendations on the institutional framework for foreign investment (FIAS).

Lebanon Financial Sector Provided a study of informal financial markets/microfinance institutions(FM & TATF).

Infrastructure Advised the Central Bank of Lebanon on the restructuring and privatizationPrivatization of the national air carrier, Middle East Airlines (CFS).

Morocco Financial Sector Provided a feasibility analysis for establishing a remittance fund (FM & TATF).

Private Infrastructure Assisted telecommunications regulator in tendering of second cellular phonelicense (TATF).

CFS Corporate Finance Services department FIAS Foreign Investment Advisory Service SME SmaLL and medium enterpnseFDI Foreign direct investment FM Regional Financial Markets livisions and TATF Technicat Assistance Trust Funds

Financiat Ma,kets Advisory Department

U

u

: =

Region/Country Purpose Description

100 Pakistan FDI Reviewed FDI policy and assessed the investment promotion agency (FIAS).

Financial Sector Conducted research studies on local debt market in preparation for the SouthAsia Symposium on Local Debt Market Development (FM & TATF).

Infrastructure Advised the government on the country's first privatization of an electricity

Privatization distribution network (CFS).

Syria Sector Study Started an analysis of the textile industry to identify investment opportunities(TATF).

Tajikistan Project Preparation Conducted a study on privatization options for TADAZ, an aluminum smelter.

West Bank and Gaza Financial Sector Assisted in developing antitrust legislation (FM & TATF).

Financial Sector Advised on a proposed tax code as it relates to private sector activities (FM & TATF).

Financial Sector Assisted microfinance institutions (FM & TATF).

Financial Sector Provided advice on mutual fund regulations (FM & TATF).

Financial Sector Provided advice on a draft securities law and proposed changes to stock exchangegovernance, rules, and compliance functions (FM & TATF).

Yemen, Republic of Financial Sector Assisted the government in establishing a stock market ((FM).

EuropeArmenia FDI Reviewed FDI legislation and assisted with an investor survey (FIAS).

Privatization Advised on corporate governance practices and legislation (TATF).

Azerbaijan Project Preparation Helped mobilize investment for rehabilitation and restructuring of

-the oil and natural gas equipment manufacturing sector (TATF).

Belarus Privatization Assisted in the privatization of small retail outlets, restaurants, and consumer

services in 14 cities (TATF).

SMEs Provided training and consulting services to SMEs through two business centers,monitored changes to legislation, and conducted nationwide information campaign

(TATF).

Bosnia and Herzegovina Privatization Assisted in the privatization of wood products companies (TATF).

SMEs Helped prepare business plans and advised SMEs on management, marketing,and other skills (Phase II) (TATF).

Region/Country Purpose Description

Bulgaria FDI Reviewed investment incentives; also reviewed and assisted in the enforcement 101of arbitration awards and contracts (FIAS).

Privatization Funded the due diligence for Hebros Bank to support its privatization (TATF).

Croatia FDI Sponsored a roundtable on investment promotion as part of the Central EuropeInitiative (FIAS).

Financial Sector Evaluated the regulatory framework for leasing (FM & TATF).

Financial Sector Conducted diagnostic study of the insurance sector (FM & TATF).

Czech Republic FDI Prepared diagnostic reassessment of the foreign investment climate (FIAS).

Project Preparation Conducted technical and market review for meat processing plant (TATF).

Estonia Privatization Provided preprivatization assistance to a shipping company (TATF).

Privatization Advised recently privatized textile firm on becoming competitive in internationalmarkets (TATF).

Hungary FDI Assessed the possibilities of private funding for investment promotion agencies(FIAS).

Privatization Provided postprivatization assistance for fiberboard company (TATF).

Latvia FDI Conducted study of administrative barriers to foreign investment (FIAS).

Privatization Provided postprivatization assistance to potentially viable SMEs (TATF).

Lithuania FDI Reviewed draft foreign investment laws (FIAS).

Financial Sector Conducted study on legal and regulatory environment of the leasing industry(FM & TATF).

Privatization Reviewed insurance company in preparation for its anticipated privatization (TATF).

Macedonia, former FDI Prepared a diagnostic study of the foreign investment environment (FIAS).Yugoslav Republic of

Moldova Project Preparation Provided interim financial management services and training to a companyto improve its control of working capital and operating ratios (TATF).

CFS Corporate Finance Services department FIAS Foreign Investment Advisory Service SME Small and medium enterpriseFOI Foreign direct investment FM Regionat Financiat Markets divisions and TATF Technical Assistance Trust Funds

Finarcial Markte Advisory Department

as'

, 0

U,

Region/Country Purpose Description

102 Romania Infrastructure Advised the municipality of Bucharest on the privatization of its water and sewerage

Privatization agency, Regia Generala de Apa Bucuresti, and provided oversight to the bidding andaward process (TATF).

Infrastructure Advised the national power utility, RENEL, on developing model transactionsPrivatization for attracting private investors to participate in two proposed independent power

projects (TATF).

Private Infrastructure Assisted the municipality of Targoviste in developing combined private heatand power projects (TATF).

Privatization Advised the state ownership fund on the privatization of its controlling interestin the country's two largest ball-bearing manufacturers (TATF).

Russian Federation FDI Conducted assessment of the FDI implications of Russia's WTO accession (FIAS).

FDI Conducted pilot project to assess and develop opportunities for mobilizing FDIin the forestry sector (TATF).

Financial Scctor Advised on legislation, regulation, and training in the leasing sector (FM & TATF).

Financial Sector Conducted financial audit of a private commercial bank to support its restructuring(FM & TATF).

Financial Sector Conducted feasibility study to identify opportunities to support a trade enhancementfacility and to assist in its restructuring (FM & TATF).

Infrastructure Advised management of RAO Unified Energy Systems on designing andPrivatization implementing a strategy for power sector reform (TATF).

Privatization Helped agribusiness firms to restructure and secure supply contracts (TATF).

Slovak Republic Financial Sector Reviewed the laws on collateral (TATF).

Slovenia FDI Concluded a review of FDI policy and promotion (FIAS).

Ukraine Financial Sector Advised on legislation and regulations on leasing and provided trainingin that sector (FM & TATF).

Privatization Provided postprivatization assistance through training and one-on-one consultingon best corporate governance practices; advised on legislation (TATF).

Privatization Assisted in the privatization of small retail outlets, restaurants, consumer services,unfinished construction sites, and social assets (TATF).

Region/Country Purpose Description

Privatization Assisted in the privatization of large industrial enterprises (TATF). 13

Privatization Expanded IFC's agricultural land privatization program into new oblasts andtrained Ukrainian nationals to implement future privatizations based on IFC'smodel (TATF).

SMEs Provided training and business consulting services to SMEs through 11 businesscenters; advised government on SME legislation (TATF).

Europe Regional Financial Sector Helped develop a business plan and budget for a private sector development facilityin the former Soviet republics of Armenia, Belarus, Georgia, Russia, and Ukraine(FM & TATF).

Latin America and the CaribbeanBolivia FDI Identified administrative barriers to investment and conducted a review

of investment incentives (FIAS).

Brazil Infrastructure Advised on the structuring of a long-term lease contract for a greenfieldPrivatization transshipment container terminal serving Northeast Brazil (CFS & TATF).

Private Infrastructure Advised the Ceara state water utility (Northeast region) in structuring andimplementing a private concession for bulk raw water treatment and supply

(CFS & TATF).

Private Infrastructure Advised the Sao Paulo state water utility in structuring, through a BOT transaction,a project aimed at increasing the water supply (CFS & TATF).

Private Infrastructure Advised the Companhia do Metropolitano de Sao Paulo (Metro) on structuringthrough a BOT the fourth metro line in Sao Paulo, one of the first cases of privatedevelopment and operation of a heavy-rail subway network in an emerging market

(CFS & TATF).

Private Infrastructure Assisted the government of Ceara state to structure and implement a multisectoralregulatory agency (CFS & TATF).

Chile Financial Sector Provided assistance to a working group on corporate governance legislation(FM & TATF).

Colombia FDI Developed a strategy and institutional framework for investment promotion (FIAS).

Costa Rica FDI Helped develop legal and institutional approaches to facilitate FDI in infrastructure(FIAS).

CFS Corporate Finance SeMces department FIAS Foreign Investment Advisory Service SME Small and medium enterpriseFDI Foreign direct investment FM Regionat Financial Markets divisions and TATF Technicat Assistance Trust Funds

Financial Markets Advisory Department

cu

4-,

5

Region/Country Purpose Description

104 Ecuador Private Infrastructure Advised the government on restructuring and privatizing state-owned enterprises,

including power generation and distribution, telecommunications, airports, andpostal services (CFS).

El Salvador FDI Provided ongoing advisory assistance (FIAS).

Guatemala FDI Developed an investment promotion strategy and suggested an institutionalframework to carry it out (FIAS).

Guyana Project Preparation Supported a market study on Caribbean demand for rattan-type furniture (TATF).

Haiti Financial Sector Supported study to assess potential for developing insurance sector and enablinglegislation (FM & TATF).

Mexico Financial Sector Reviewed the existing securities market regulatory framework and currentsupervisory practices (FM & TATF).

Nicaragua FDI Helped establish an investment promotion agency, examined the legal frameworkfor FDI, and helped implement new FDI laws (FIAS & TATF).

Financial Sector Commented on pending legislation to set up the regulation and operationof leasing companies (FM & TATF).

Privatization Assisted in the privatization process of BANIC, the largest government-ownedbank in the country, through expansion of its equity capital (CFS & TATF).

Panama Infrastructure Advised on the privatization of the state-owned electric utility, IRHE, which wasPrivatization restructured into four generation and three distribution companies (CFS).

Peru Financial Sector Advised on the establishment of a secondary mortgage market entity (FM & TATF).

Latin America and Sector Study Helped to develop a standard of products and services for adoption by small hotelsthe Caribbean Regional in the Caribbean (TATF).

SMEs Assisted SMEs in Hurricane Mitch-affected countries of Central America, targetingproject development, training and skills development, and access to funding (TATF).

WorldwideWorldwide Environment Cofinanced workshop for international audience to discuss environmental concerns

over the use of Orimulsion, a natural fossil fuel produced in Venezuela (TATF).

Financial Sector Sponsored conference on business incubation and venture capital (TATF).

Sector Study Reviewed investment opportunities in the high-technology sector (TATF).

Appendixes

APPENDIX A

Governors and AlternatesJune 30, 1999

Member Governor Alternate

AAfghanistan (vacant) (vacant)Albania Arben Malaj Fatos IbrahimiAlgeria Abdelkrim Harchaoui Omar BougaraAngola Emmanuel Moreira Carneiro Sebastiao Bastos LavradorAntigua and Barbuda John E. St. Luce Ludolph BrownArgentina Roque Benjamin Fernandez Pedro PouArmenia Armen R. Darbinian Garnik NanagulyanAustralia Peter Costello Kathy SullivanAustria Wolfgang Ruttenstorfer Hans-Dietmar SchweisgutAzerbaijan ELman Siradjogly Rustamov Fuad Akhundov

BBahamas, The William C. Allen Ruth MillarBahrain Abdulla Hassan Saif Zakaria Ahmed HejresBangladesh Shah A.M.S. Kibria Masihur RahmanBarbados Owen S. Arthur Erskine R. GriffithBelarus Gennady V. Novitsky Vladimir N. ShimovBelgium Jean-Jacques Viseur Guy QuadenBelize Said W. Musa Yvonne S. HydeBenin Albert Tevoedjre Pierre John IgueBolivia Herbert Mueller Costas Alberto Valdes AndreattaBosnia and Herzegovina Mirsad Kurtovic Drago BilandzijaBotswana Ponatshego H.K. Kedikilwe Serwalo S.G. TumeloBrazil Pedro Sampaio Malan Arminio Fraga NetoBulgaria Muravei Radev Martin ZaimovBurkina Faso Tertius Zongo Patrice NikiemaBurundi Astere Girukwigomba Leon Nimbona

CCambodia Keat Chhon Sun Chan TholCameroon Justin Ndioro Daniel Njankouo LamereCanada Paul Martin Huguette LabelleCape Verde Antonio Gualberto do Rosario Jose Ulisses Correia e SilvaCentral African Republic Anicet Georges Dologuele Jacob MbaitadjimChad Mahamat Ali Hassan Abderhamane DadiChile Eduardo Aninat Joaquin VialChina Xiang Huaicheng Jin LiqunColombia Juan CamiLo Restrepo Salazar Jaime RuizComoros Mohamed Abdou Madi Maoulana CharifCongo, Democratic Republic of Fernand Tala-Ngai Jean-Claude Masangu MulongoCongo, Republic of Mathias Dzon Clement MierassaCosta Rica Leonel Baruch Eduardo Lizano FaitC6te d'Ivoire Daniel Kablan Duncan N'Goran NiamienCroatia Borislav Skegro Josip KulisicCyprus Takis Klerides Antonis MalaosCzech Republic Ivo Svoboda Oldrich Dedek

DDenmark Poul NieLson Ellen Margrethe LojDjibouti Yacin Elmi Bouh Nouh Omar MiguilDominica Julius C. Timothy Cary A. HarrisDominican Republic Hector Manuel Valdez Albizu Luis Manuel Piantini M.

EEcuador Ana Lucia Armijos Hidalgo Mauricio Pareja CanelosEgypt, Arab Republic of Atef Mohamed Mohamed Ebeid Youssef Boutros GhaliEl Salvador Juan Jose Daboub Jose Luis Trigueros

:X

CL 0 Q. Equatorial Guinea Antonio Nve Ngu Miguel Abia Biteo: 2 Eritrea Gebreselassie Yosief (vacant)

Estonia Siim Kallas Mihkel ParnojaEthiopia Sufian Ahmed Girma Birru

FFiji Mahendra Pal Chaudhry Savenaca NarubeFinland Sauli Niinisto Pekka Haavisto

106 France Dominique Strauss-Kahn Jean Lemierre10 GGabon Casimir Oye-Mba Claude Ayo IguendhaGambia, The Famara L. Jatta Yusupha A. KahGeorgia David Onoprishvili Vladimer PapavaGermany Heidemarie Wieczorek-Zeul Caio Koch-WeserGhana Richard Kwame Peprah Victor SelormeyGreece Yannos Papantoniou Christos PachtasGrenada Keith Mitchell Garvey LouisonGuatemala Pedro Miguel Lamport K. Edin Homero Velasquez EscobedoGuinea Elh. Th. Mamadou Cellou Diallo Cellou Dalein DialloGuinea-Bissau Issufo Sanha Issufi SaneGuyana Bharrat Jagdeo MichaeL Shree ChandHHaiti Fred Joseph Fritz JeanHonduras Gabriela Nunez de Reyes Victoria Asfura de DiazHungary Zsigmond Jarai Werner Riecke

IIceland Halldor Asgrimsson Geir Hilmar HaardeIndia Yashwant Sinha Vijay Laxman KelkarIndonesia Bambang Subianto Miranda S. GoeltomIran, Islamic Republic of Hossein Namazi Mehdi Navab MotlaghIraq Issam Rashid Hwaish Hashim Ali ObaidIreland Charlie McCreevy Paddy MullarkeyIsrael Jacob A. Frenkel Ben-Zion ZilberfarbItaly Antonio Fazio Mario Draghi

JJamaica Omar Lloyd Davies Wesley HughesJapan Kiichi Miyazawa Masaru HayamiJordan Rima Khalaf Humaidi Abderrzaq Bani Hani

KKazakhstan Oraz Jandosov Roman SolodchenkoKenya Yekoyada F.O. Masakhalia Margaret ChemengichKiribati Beniamina Tinga Bureti WilliamsKorea, Republic of Bong-Kyun Kang Chol-Hwan ChonKuwait Ali Salem Al-Ali At-Sabah Bader Meshari Al-HumaidhiKyrgyz Republic Marat Sultanov Urkaly T. IsaevLLao People's Democratic Republic Khamphoui Keoboualapha Phiane PhilakoneLatvia Roberts Zile Ingrida UdreLebanon Georges Corm Nasser SaidiLesotho Leketekete Victor Ketso Molelekeng E. RapolakiLiberia John Weseh McClain (vacant)Libya Mohamed A. Bait Elmal (vacant)Lithuania Algirdas G. Semeta Arvydas KregzdeLuxembourg Luc Frieden Jean Guill

MMacedonia, Boris Stojmenov Zlatka Popovskaformer Yugoslav Republic of

Madagascar Pierrot J. Rajaonarivelo Constant HoraceMalawi Cassim Chilumpha Ted A. KalebeMalaysia Mustapa Mohamed Othman Mohd. RijalMaldives Fathulla Jameel Adam ManikuMali Ahmed El Madani Diallo Soumaila CisseMarshall Islands Tony de Brum David BlakeMauritania Mohamed OuId Nany Abdallah Ould HormtallahMauritius Rundheersing Bheenick Dharam Dev ManrajMexico Jose Angel Gurria Trevino Martin M. WernerMicronesia, Federated States of John Ehsa Sebastian L. AnefalMoldova Anatol Arapu Dumitru UrsuMongolia Yansanjav Ochirsukh Jigjid UnenbatMorocco Fathallah Oualalou Ahmed Lahlimi AlamiMozambique Adriano Afonso Maleiane Luisa Dias DiogoMyanmar Khin Maung Thein Soe Lin

NNamibia Saara Kuugongelwa Usutuaije MaamberuaNepal Mahesh Acharya Ram Binod BhattaraiNetherlands Gerrit Zalm Eveline HerfkensNew Zealand Bill English Alan BollardNicaragua Esteban Duque Estrada Mario De FrancoNiger Ide Gnandou Adamou SalaoNigeria Adamu Ciroma Samuel Chukwuma NwokediNorway Hilde Fraljord Johnson Leiv Lunde 107

0Oman Ahmed Bin Abdulnabi Macki Mohammed bin Nasser Al-Khasibi

pPakistan M. Ishaq Dar Zaheer SajjadPalau Tommy Remengesau, Jr. Elbuchel SadangPanama Fernando Aramburu Porras Rene Luciani LassoPapua New Guinea Iairo Lasaro Brown BaiParaguay Federico Zayas Anibal Fernando Paciello RodriguezPeru Victor Joy Way Alfredo Jalilie AwaparaPhilippines Edgardo B. Espiritu Gabriel C. SingsonPoland Hanna Gronkiewicz-Waltz Ryszard KokoszczynskiPortugal Antonio de Sousa Franco Fernando Teixeira dos Santos

RRomania Decebal Traian Remes Emil Iota GhizariRussian Federation Yuri Maslyukov Andrei ShapovaliantsRwanda Donald Kaberuka Jean Marie Karekezi

SSt. Kitts and Nevis Denzil Douglas Timothy HarrisSt. Lucia Kenny D. Anthony Bernard La CorbiniereSamoa Tuilaepa S. Malielegaoi Epa TuiotiSaudi Arabia Ibrahim A. At-Assaf Jobarah Al-SuraisrySenegal Mohamed El Moustapha Diagne El Hadj Ibrahima SaIlSeychelles Jeremie Bonnelame Alain Butler-PayetteSierra Leone James O.C. Jonah James BucknallSingapore Richard Hu Tsu Tau Lim Siong GuanSlovak Republic Ivan Miklos Vladimir MasarSlovenia Mitja Gaspari Irena SodinSolomon Islands Alpha Kimata George KiriauSomalia (vacant) (vacant)South Africa Trevor Andrew Manuel Gill MarcusSpain Rodrigo de Rato Figaredo Elena Pisonero RuizSri Lanka Chandrika Bandaranaika Kamaratunga Dixon NilaweeraSudan Abdel Wahab Osman Izzedin Ibrahim HassanSwaziland Majozi Sithole Musa D. FakudzeSweden Bosse Ringholm Pierre SchoriSwitzerland Pascal Couchepin Joseph DeissSyrian Arab Republic Mohammed Khaled Al-Mahayni Mohamad Bittar

TTajikistan Yakhyo N. Azimov Murotali M. AlimardanovTanzania Nassoro Malocho Raphael 0. MollelThailand Tarrin Nimmanahaeminda Suphachai PhisitvanichTogo Abdoul-Hamid S.B. Tidjano-Dourodjaye Kossi AssimaidouTonga Kinikinilau Tutoatasi Fakafanua 'Aisake V. EkeTrinidad and Tobago Brian Kuei Tung Kamal MankeeTunisia Mohamed Ghannouchi Abdelhamid TrikiTurkey Yener Dincmen Cuneyt SelTurkmenistan Hudaiberdy A. Orazov Ovez Agaev

UUganda Gerald M. Ssendaula Emmanuel Tumusiime-MutebiteUkraine Sergiy L. Tigipko Roman ShpekUnited Arab Emirates Hamdan bin Rashid Al-Maktoum Mohamed K. KhirbashUnited Kingdom Clare Short Gordon BrownUnited States Robert E. Rubin Stuart E. EizenstatUruguay Luis Mosca Ariel DavrieuxUzbekistan Bakhtiyar S. Khamidov Akram Mukhidov

VVanuatu Sela Molisa Jeffry WilfredVenezuela Jorge Giordani Maritza IzaguirreVietnam Nguyen Tan Dung Le Duc Thuy

yYemen, Republic of Ahmed Mohamed Sofan Anwar Rizq Al-Harazi

zZambia Edith Zewelani Nawakwi Benjamin MweeneZimbabwe Herbert M. Murerwa Leonard Ladislas Tsumba

0)

X APPENDIX B

DrIectos and Aternates and Their Voting powevJune 30, 1999

108Percent

Director Alternate Director Casting Votes of Total Votes of Total

APPOINTED

Jan Piercy Michael Marek United States 569,629 23.80

Satoru Miyamura Akira Kamitomai Japan 141,424 5.91

Helmut Schaffer Eckhardt Biskup Germany 129,158 5.40

Jean-Claude MilLeron Jean Pesme France 121,265 5.07

Stephen Pickford Myles Wickstead United Kingdom 121,265 5.07

ELECTED

Ruth Bachmayer Luc Hubloue Austria, Belarus, Belgium, Czech Republic, Hungary, Kazakhstan, 125,221 5.23(Austria) (Belgium) Luxembourg, Slovak Republic, Slovenia, Turkey

Franco Passacantando Helena Cordeiro Albania, Greece, Italy, Portugal 98,866 4.13(Italy) (Portugal)

Surendra Singh1 Syed Ahmed Bangladesh, India, Sri Lanka 98,264 4.11(India) (Bangladesh)

Federico Ferrer (vacant) Costa Rica, El Salvador, Guatemala, Honduras, Mexico, 97,191 4.06(Spain) Nicaragua, Spain, Venezuela

Terrie O'Leary Alan David Slusher Antigua and Barbuda, The Bahamas, Barbados, Belize, 92,944 3.88(Canada) (Belize) Canada, Dominica, Grenada, Guyana, Ireland, Jamaica,

St. Kitts and Nevis, St. Lucia

Ilkka Niemi Anna M. Brandt Denmark, Estonia, Finland, Iceland, Latvia, Lithuania, 86,693 3.62(Finland) (Sweden) Norway, Sweden

Pieter Stek Tamara Solyanyk Armenia, Bosnia and Herzegovina, Bulgaria, Croatia, 86,209 3.60(Netherlands) (Ukraine) Cyprus, Georgia, Israel, Macedonia (former Yugoslav Republic of),

Moldova, Netherlands, Romania, Ukraine

Andrei Bugrov Eugene Miagkov Russian Federation 81,592 3.41(Russian Federation) (Russian Federation)

Murilo Portugal Patricio Rubianes Brazil, Colombia, Dominican Republic, Ecuador, Haiti, 74,779 3.13(Brazil) (Ecuador) Panama, Philippines, Trinidad and Tobago

Young-Hoi Lee2 Lewis D. Holden Australia, Cambodia, Kiribati, Korea (RepubLic of), 67,784 2.83(Republic of Korea) (New Zealand) Marshall IsLands, Micronesia (Federated States of,

Mongolia, New Zealand, Palau, Papua New Guinea,Samoa, Solomon Islands, Vanuatu

Valeriano F. Garcia Ivan Rivera Argentina, Bolivia, Chile, Paraguay, Peru, Uruguay 64,144 2.68(Argentina) (Peru)

Matthias Meyer Jerzy Hylewski Azerbaijan, Kyrgyz Republic, PoLand, Switzerland, Tajikistan, 60,548 2.53(Switzerland) (Poland) Turkmenistan, Uzbekistan

Jannes Hutagalung Wan Abdul Aziz Wan Abdullah Fiji, Indonesia, Lao People's Democratic Republic, Malaysia, 59,912 2.50(Indonesia) (Malaysia) Myanmar, Nepal, Singapore, Thailand, Tonga, Vietnam

Godfrey Gaoseb Girmai Abraham Angola, Botswana, Burundi, Eritrea, Ethiopia, The Gambia, 58,645 2.45(Namibia) (Eritrea) Kenya, Lesotho, Liberia, Malawi, Mozambique, Namibia,

Nigeria, Seychelles, Sierra Leone, South Africa, Sudan,Swaziland, Tanzania, Uganda, Zambia, Zimbabwe

PercentDirector Alternate Director Casting Votes of Total Votes of Total

Inaamul Haque Mohamed Dhif Algeria, Ghana, Iran (Islamic Republic of), Iraq, Morocco, 44,964 1.88 10(Pakistan) (Algeria) Pakistan, Tunisia

Khalid M. Al-Saad Mohamed Kamel Amr Bahrain, Egypt (Arab Republic of), Jordan, Kuwait, 34,079 1.42(Kuwait) (Arab Republic of Egypt) Lebanon, Libya, Maldives, Oman, Syrian Arab Republic,

United Arab Emirates, Yemen (Republic of)

Khalid H. Alyahya Khaled Al-Aboodi Saudi Arabia 30,312 1.27(Saudi Arabia) (Saudi Arabia)

Zhu Xian Zou Jiayi China 24,750 1.03(China) (China)

Bassary Toure Paulo F. Gomes Benin, Burkina Faso, Cameroon, Cape Verde, Central African 22,947 .96(Mali) (Guinea-Bissau) Republic, Chad, Comoros, Congo (Democratic Republic of),

Congo (Republic of), C6te d'Ivoire, Djibouti, Equatorial Guinea,Gabon, Guinea, Guinea-Bissau, Madagascar, Mali, Mauritania,Mauritius, Niger, Rwanda, Senegal, Togo

In addition to the directors and alternates shown in the foregoing list, the following persons served after October 31, 1998:

End of PeriodDirector End of Period of Service Alternate Director of Service

Li Yong December 31, 1998 Kacim Brachemi June 14, 1999(China) (Algeria)

Christopher Legg March 31, 1999(Australia)

Mihai Tanasescu May 31, 1999(Romania)

Zhao Xiaoyu February 28, 1999(China)

Note: Afghanistan (361 votes) and Somalia (333 votes) did not participate in the 1998 Regular Election of Directors.'To be succeeded by B.P. Singh (India), effective August 1, 1999.'To be succeeded by Neil Hyden (Australia), effective August 1, 1999.

APPENDIX C

Bnking Adv'isory G[roup 999

Sir David Scholey Mr. Richard Fisher Mr. Walter V. ShipleyChairman, Banking Advisory Group Chairman Chairman and Chief Executive OfficerMr. Abdlatif Y. Al-Hamad Morgan Stanley and Company, Inc. The Chase Manhattan CorporationMr. Abdtaref Y. Al-Hamad New York, New York, United States New York, New York, United StatesDirector GeneraV/Chairman of the BoardArab Fund for Economic & Mr. Toyoo Gyohten Mr. Gerrit TammesSocial Development President Chairman

Safat, Kuwait Institute for International Pactual Capital InternationalMonetary Affairs London, United KingdomMr. John Bond Tko aa

Group Chief Executive Tokyo, Japan Mr. Marc VienotHSBC Holdings plc Mr. Jurgen Sarrazin Chairman and Chief ExecutiveLondon, United Kingdom Chairman Societe Generale

Dresdner Bank AG Paris, FranceMr. Jan Ekman Frankfurt am Main, GermanyVice ChairmanSvenska HandelsbankenStockholm, Sweden

APPENDIX D

[iDE@rgilng MVa[rkets D@ata Base [gC henstaNe HndL; Advis(ory Panel

In 1993, the Emerging Markets Data Base (EMDB) set up an external panel to advise EMDB on issues of index construction, professional standards,industry practice, and market needs. Eight of the ten panel members come from the external finance community. The two IFC members are theDirector, Financial Markets Advisory Department, and the Head of EMDB.

Allan B. Conway Mark Mobius Robert SafferHead of Global Emerging Markets Managing Director Head, Equity DerivativesWestLB Asset Management (UK) Limited Templeton Investment Management Lehman BrothersLondon, United Kingdom (Singapore) Pte. Ltd. New York, New York, United States

Robert Ginis Singapore Stephen B. SatchellPrincipal Investment Strategist Martin Ryan Professor, Department of AppliedIntemational Equity Strategies Group Managing Director & Chairman EconomicsBarclays Global Investors Russell-Mellon Inc. Trinity College, Cambridge UniversitySan Francisco, California, United States Frank Russell Company Cambridge, United KingdomPeter G. Leahy Tacoma, Washington, United States Hideo TanakaIntemationol Structured Products Group Executive Officer & Chief Global StrategistManaging Director Daiwa SB Investments Ltd.

State Street Global Advisors Tokyo, JapanBoston, Massachusetts, United States

APPENDIX E

Business Advisory CounciL

IFC's Business Advisory Council is composed of eminent industrialists, bankers, and statesmen from around the world.

111Mr. S. Babar Ali Mr. Oscar Garcia Mendoza Mr. Sergey K. OvsiannikovAdvisor President Chairman & Chief Executive OfficerPackages Limited Banco Venezolano de Credito, SACA MezhcombankLahore, Pakistan Caracas, VenezueLa Moscow, Russian Federation

Mr. Rashed Al-Rashed Mr. Jaime Garcia-Parra Mr. Deepak S. ParekhManaging Director President ChairmanAl-Rashed AL-Humaid Group J. Garcia y Cia. Housing Development FinanceRiyadh, Saudi Arabia Santa Fe de Bogota, Colombia Corporation Limited, India (HDFC)Mr. John E. Avery Dr. Utomo Josodirdjo Mumbai, IndiaFormer Chairman Director Mr. Enrique RueteAmericas Society & Council P.T. Bahana Pembinaan Usaha Chief Executive Officerof the Americas Jakarta, Indonesia Roberts S.A. de Inversiones,Princeton, New Jersey, United States Roberts GroupMr. It Kyu Kang Buenos Aires, ArgentinaMr. Mahmoud Abdel Aziz ChairmanChairman Global Financial Services Mr. Thomas SchmidheinyNational Bank of Egypt Seoul, Korea ChairmanCairo, Egypt Holderbank

Mr. Jerome Monod Jona, SwitzertandMr. Y. Alain Bambara Chairman & Chief Executive OfficerPresident Lyonnaise des Eaux Khun Chartsiri SophonpanichCosmivoire Nanterre, France PresidentAbidjan, Cote d'Ivoire Bangkok Bank Public Company LimitedMr. James Mulwana Bangkok, ThailandMr. Ferenc Bartha ChairmanChief Executive Officer Uganda Manufacturers Association Mr. 0. Franqois TankpinouTriGranit Development Corporation Kampala, Uganda PresidentBudapest, Hungary Societe Fruitex IndustrieProf. Wiseman L. Nkuhlu Cotonou, BeninMr. Yavuz Canevi ChairmanChairman Development Bank of Southern Africa Mr. Gary WendtTurk Ekonomi Bankasi (TEB) Midrand, South Africa PresidentIstanbul, Turkey Mr. Andrzej Olechowski GE Capital Services

Mr. Louis Casely-Hayford Chairman of the Supervisoiy BoardChairman Central Europe Trust Sir Gordon Y. S. WuLouis Casely-Hayford & Associates Warsaw, Poland Chairman & Managing DirectorAccra, Ghana Hopewell Holdings LimitedMr. Jorma Oltila Wanchai, Hong KongMr. Oliver Clarke PresidentChairman Nokia Mr. Wang XuebingJamaica National Building Society Helsinki, Finland Chairman & PresidentNCB (Investments) Limited d Bank of ChinaKingston, Jamaica Vrce President Beijing, China

Mr. Jose Antonio Fernandez SMI-SocietA Metallurgica Italiana spa Mr. Tomas ZinnerChief Executive Officer Milan, Italy President & Member of the BoardFomento Economico Mexicano, UnibancoS.A. de C.V. - FEMSA Sao Paulo, Brazil

Monterrey, Mexico

n._ APPENDIX F

President' James D. Wolfensohn Manager, FinanciaL Markets Iyad MaLas112 Executive Vice President2 Peter Woicke Algeria, Arab Republic of Egypt, Jordan, Lebanon.

Libya, Morocco, Syrian Arab Republic, Tunisia,Corporate Secretary' Shengman Zhang West Bank and Gaza

Compliance Advisor/Ombudsman Meg Taytor Manager, PortfoLio Management Michael Essex

Vice President, Finance Birgitta Kantola and Credit Reviewand Planning East Asia and Pacific Department

Vice President and GeneraL Counsel Carol F. Lee Director Javed Hamid

Vice President, Human Resources Dorothy H. Berry Cambodia, China, Fiji, Kiribati, Republic of Korea,and Administration Lao PDR, Marshall Islands, Micronesia, Mongolia,

Vice President, Investment Operations JemaL-ud-din Kassum Palau, Papua New Guinea, Philippines, Samoa,Solomon Islands, Thailand, Tango, v'an uatu, Vietnam

Vice President, PortfoLio Management Assaad J. Jabreand Advisory Operations Manager, Financiat Markets Kumiko Yoshinari

Vice President, Private Sector Nemat TaLaat Shafik Manager, General Manufacturing Ravinder BuggaDeveLopment & Infrastructure, IBRD Manager, PortfoLio Management Khanh Nguyen

and Credit ReviewREGIONAL DEPARTMENTS

Europe II DepartmentCentral and Southern Europe Department Director3 Edward NassimDirector HaroLd Rosen Armenia, Belarus, Georgia,

Associate Director, Robin GLantz Russian Federation, UkrainePortfoLio Management and Credit Review Manager, Financiat Mary Ellen Iskenderian

Manager, FinanciaL Markets Monish Dutt Markets

Managers and/or Country Anchors, Manager, GeneraL Manufacturing Stephanie von FriedeburgGeneral Manufacturing Manager, TechnicaL Assistance Richard RankenAlbania, Bosnia, Romania, Turkey (HQ) Sujata LambaAzerbaUan, Moldova Sita Ramaswami Latin America and the Caribbean DepartmentBulgaria, Hungary, Slovakia, Slovenia Kenneth AssaL Director4 Karl VoLtaireCroatia Matthew MorrisonCzech Republic, FYR Macedonia Esteban Altschut Associate Director Bernard PasquierEstonia, Latvia, Lithuania, Poland Jyrki KoskeLo Manager, FinanciaL Markets Haydee CetayaTurkey (based in Istanbul) S. Balasubramanian Manager, PortfoLio Management Stantey Greig

Central Asia, the Middle East, and North Africa Department and Credit Review

Director Mohsen A. KhaLit Manager, Strategy and Coordination Bernard Sheahan

Associate Director Khosrow Zamani South and Southeast Asia DepartmentAfghanistan, Bahrain, Islamic Republic of Iran, 5Iraq, Kazakhstan, Kuwait, Kyrgyz Repubic, Oman, Director Rashad-Rudolf KaldanyPakistan, SaudiArabia, Tajikistan, Turkmenistan, Manager, Portfolio Management Eric CruikshankUnited Arab Emirates, Uzbekistan, Republic of Yemen and Credit Review

'These officers hold the same position in IBRD. 3Based in Moscow.2ALso serves as Managing Director for the World Bank, with responsibility for 4Based in Rio de Janeiro.

Private Sector Development across the Bank Group. 5Based in New Delhi.

Resident Manager, South Asia Usha Rao-Monari Oil, Gas, and Mining DepartmentBongladesh, Bhutan, India, Maldives, Director Philippe LietardMyanmar, Nepal, Sri Lanka

Manager, Division 1, Oil and Gas Maria da Graca DominguesManager and Resident Representative Amitava Banerjee Mngr iiin2 iigAmtTuiu

Indonesio, Moloysia ~~~~~~~~Manager, Division 2, Mining Azmat Taufique

Iandanesi, Minalaia Markets Hany Assaad Manager, Portfolio Management Farid DossanilManager, Financial Markets Hany Assaad and Credit Review 113

Sub-SaharanAfrica Department Senior Adviser Claus A. Westmeier

Director Cesare Calari Power Department

Transactions Group Manager Udayan Wagle Director Vivek Talvadkar

Regional Office Director, Guy C. Antoine Associate Director Jean-Paul PinardWest and Central Africa

Manager, Portfolio Management Apinya SuebsaengRegional Office Director, and Credit ReviewSouthern Africa Mwaghazi W. Mwachofi

Regional Office Director, Michael E. H. Hooper Telecommunications, Transportation and Utilities Department

Eastern Africa Director Declan J. Duff

Manager, Financial Markets Bahadurali Jetha Manager, Transportation and Utilities Francisco Tourreilles

Manager, Portfolio Management Colin Warren Manager, Telecommunications Kent E. Lupbergerand Credit Review Manager, Portfolio Management Joseph Solan

Manager, Strategy and Coordination Abdelkader H. Allaoua and Credit Review

INDUSTRY DEPARTMENTS SPECIALIST DEPARTMENTS

Agribusiness Department Controller's and Budgeting Department

Director Tei Mante Director Christian Grossmann

Manager, Investments Sulyporn Kulsrethsiri Senior Manager, Budgeting Division Richard Moss

Manager, Portfolio Management Macodou N'Daw Manager, Accounting Division Paul Bravery

and Credit Review Manager, Financial Planning Teng-Hong Cheah

Financial Markets Advisory Department and PoLicy Division

Director Claudia J. Morgenstern Manager, Internal Controls Allen F. Shapiroand Special Projects Division

Senior Adviser Rudolf van der Bijl

Manager, Outreach Programs Minh Chau Nguyen Corporate Planning Department

Head, Corporate Services Arthur Levi Director Nissim EzekieL

Head, Emerging Markets Data Base Peter J. Wall Manager, Private Sector Strategies Dileep Wagle

Head, Private Equity (vacant) & Corporate PlanningManager, Technical Assistance Gary E. Bond

Head, Structured Finance Arun Kumar Sharma & Trust Funds Program

Chemicals, Petrochemicals and Fertilizers Department Corporate Portfolio Management Group

Director Jean-Philippe Halphen Senior Manager Marc Babin

Associate Director Richard Parry Head, Equity Management Desk Sebastien G. Thiriez

Manager Jerome SooklalCorporate Relations Unit

Corporate Finance Services Department Manager Mark A. Constantine

Director Andre J. CraccoCredit Review Department

Manager Reyaz A. Ahmad Director Paul Hinchey

Manager Denise Leonard Associate Director Sakdiyiam Kupasrimonkol

Economics Department Associate Director, Environment Martyn J. RiddLe< Director and Chief Economic Adviser Guy Pierre Pfeffermann Manager, Environment and GLen Armstrong

SociaL Review UnitFinancial Operations UnitSenior Manager Simon V. FowLer Manager, EnvironmentaL Projects Unit Louis Boorstin

Head, FinanciaL Markets Environmentat Letitia F. Lowe114 Human Resources and Administration Services Unit

Vice President and Director Dorothy H. Berry Treasury Department

Manager, Administration Geoffrey A. Willing Director Farida KhambataManager, Personnel Jean Bradier Unit Manager, Funding John BorthwickManager, Recruitment Services Susan Jones Adams Unit Manager, Risk Management/ Takehisa Eguchi

Information Technology Information TechnologyChief Information Officer Guy-Pierre De Poerck Unit Manager, Ctient Products and Shanker KrishnanChiagef , Informtione Systcer Guy jdPierre DeuPok Asset Liability Management

DeLivery Group Wajdi Bustani Unit Manager, Liquid Assets and Mark SpindelDelivery Group ~~~~~~~~Cash ManagementChief Technology Officer Paut Standen

Legal Department OTHERVice President and General Counsel CaroL F. Lee Foreign Investment Advisory ServiceDeputy General CounseL Jennifer A. Sutlivan GeneraL Manager' Date R. WeigetChief Counsel Fernando Cabezas Manager Boris VeLicChief CounseL Victoria C. Choy Manager Joseph BattatChief CounseL David dAdhemar RegionaL Program Manager Andrew ProctorChief Counsel Caros Fernandez-Duque (Sydney, Australia)Chief CounselE. CAnres Fernandorenau Principal FinanciaL Adviser Vasant H. KarmarkarChief CounseL E. Andres HernandorenaChief CounseL Maher Mahmassani PROJECT DEVELOPMENT FACILITIES

Chief Counset Hugo J. Waszink Africa Project Development FacilityChief Speciat Operations Officer, Alex KeysertingkMarketing and Business Development IFC Facilities

Director Sumio Takeichi RegionaL Manager, East Africa Mischek Ngatunga

Operations Evaluation Group (Nairobi, Kenya)Director William E. Stevenson Regionat Manager, Southern Africa James Hellerman

(Harare, Zimbabwe)Special Operations Unit Regional Manager, West Africa Henri RabarijohnManager Woonki Sung (Abidjan, C6te d'Ivoire)

Syndications and International Securities Group Manager, South Africa John JamesSenior Manager Suellen Lambert Lazarus (Johannesburg, South Africa)Manager, B Loan Management David Terrance Mekong Project Development Facility (Hanoi, Vietnam)

Technical and Environment Department Manager Thomas S. DavenportDirector Andreas M. Raczynski South Pacific Project Facility (Sydney, Australia)Associate Director, Technical Services Garth Hedley Regional Manager Graeme Rothwel

Senior Manager, TechnicaL Services Gopi Nath PuriManager, TechnicaL Services Juan C. CaLtieri

'This officer holds the same position in IBRD.

APPENDIX G

NeW RepTesentatives and Contacts

Country City Name Title

Albania Tirana ELira Sakiqi Program Manager 115

Argentina Buenos Aires Ileana Boza Resident Representative

Armenia Yerevan Thomas Rader Head of IFC Operations, Armenia

Australia (FIAS) Sydney Andrew Proctor RegionaL Manager

AustraLia (SPPF) Sydney Graeme W. RothweLL Regional Manager

Azerbaijan Baku ALiya Nuriyeva Program Coordinator

BangLadesh Dhaka Hafeezuddin Ahmad Sr. Investment Officer

BeLarus Minsk CarL Dagenhart Project Manager, Privatization

BoLivia La Paz Juan CarLos Echeverria Investment Officer

Bosnia & Herzegovina Banja Luka Mirjana Stojanovic Program Coordinator

Bosnia & Herzegovina Sarajevo Graham SettLe Program Manager

BraziL Fortaleza RaLph Wally Daniels Sr. Investment Officer

Brazil Rio de Janeiro KarL VoLtaire Resident Director, Latin Americaand the Caribbean

Brazil Sao PauLo KarL Voltaire Resident Director, Latin Americaand the Caribbean

Bulgaria Sofia George ALexandrov Program Manager

Cambodia Phnom Penh Don Boring Program Coordinator

Cameroon Douala Mohamadou Diop RegionaL Representativefor CentraL Africa

China Beijing Davin Mackenzie Resident Representative

C6te d'Ivoire Abidjan Luciano Borin Regional Representativefor West Africa

C6te d'Ivoire Abidjan Guy Antoine RegionaL Office Director forWest and Central Africa

C6te d'Ivoire, APDF Abidjan Henri E. Rabarijohn RegionaL Manager,Francophone Africa

Croatia Zagreb Vedran AntoLjak Program Coordinator

Czech RepubLic Prague MiLos Vecera Head of Office

Egypt, Arab Republic of Cairo Sami Haddad RegionaL Representative

Estonia TaLLinn Andrus Viirg Operations Officer

Ethiopia Addis Ababa Andrew Danino Sr. Investment Officer

France Paris Vikas Thapar Special Representativefor Europe, France

Georgia TbiLisi Lisa Kaestner Head of IFC Operations, Georgia

Germany Frankfurt Oltmann Siemens Special Representativefor Europe, Germany

Ghana Accra Yaw Kwakwa, Actg. Investment Officer

Ghana, APDF Accra Ignatius Peprah Regional Manager, AngLophone Africa

GuatemaLa GuatemaLa City YoLande Duhem Resident Representative

Hungary Budapest BorbaLa X. Czako Program Manager

India Mumbai Prakash Yardi Principal Investment Officer

India New Delhi Rashad R. KaLdany Resident Director for Southand Southeast Asia

QJ

x

CL ro Indonesia Jakarta Amritava Banerjee Manager, Southeast Asia Division

Japan Tokyo Morinobu Iritani Special Representative

Kazakhstan Almaty Janat Akhmetova Investment Officer

Kenya Nairobi Michael Hooper Regional Representativefor Eastern Africa

116 Kenya, APDF Nairobi Mischeck Ngatunga Regional Manager, Eastern AfricaKorea, Republic of Seoul Deepak Khanna Resident Representative

Kyrgyz Republic Bishkek GuEnura Djuzenova IFC Operations Officer

Lao PDR Vientiane Peter Michener Program Coordinator

Latvia Riga Roger Handberg Program Coordinator

Lithuania Vilnius Peter Modeen Operations Officer

Macedonia, FYR Skopje Rozita Jovanovska Program Coordinator

Mexico Mexico City Manuel E. Nuinez Resident Representative

Moldova Chisinau Alla Girjau Program Coordinator

Mongolia c/o Beijing, China Shannon Atkeson Investment Officer

Morocco Casablanca Andre Laude Resident Representative (acting)

Mozambique Maputo Oliveira Juvane Investment Officer

Nepal Kathmandu Sudhir Mittal Country Coordinator

Nigeria Lagos Akbar Husain Resident Representative

Pakistan Islamabad Raymond Chiu Regional Representative

Philippines Manila Vipul Prakash Resident Representative

Poland Warsaw Tomasz Telma Program Manager

Romania Bucharest Ana Maria Mihaescu Program Manager

Russian Federation Moscow Edward Nassim Resident Director, Europe IIDepartment

Senegal Dakar Souleymane Traore Regional Coordinator

Singapore Singapore Francois Grossas Principal Investment Officer,Syndications

Slovak Republic Bratislava Pavol Vajda Program Coordinator

South Africa Cape Town Henning Amelung Investment Officer

South Africa Johannesburg (vacant) Regional Representativefor Southern Africa

South Africa, APDF Johannesburg John James Regional Manager,Southern Africa

Sri Lanka Colombo Sanjiva Senanayake Country Coordinator

Thailand Bangkok Khalid A. Mirza Regional Representative

Trinidad & Tobago Port of Spain Kirk Ifill Investment Officer

Turkey Istanbul S. Balasubramanian Resident Representative

Uganda Kampala Dan Kasirye Investment Officer

Ukraine Kiev Alvona Voloshina Head of IFC Operations, Ukraine

United Kingdom London Douglas Gustafson Special Representative for Europe

Uzbekistan Tashkent Elbek Rikhsiyev Program Coordinator

Vietnam Hanoi Wclfgang Bertelsmeier Resident Representative

Vietnam, MPDF Hanoi Thomas S. Davenport Manager, MPDF

Vietnam, MPDF HCMC Mario Fischel Sr. Investment Officer

West Bank & Gaza Al-Ram Salem Rohana Investment Officer

Zimbabwe Harare Michael Tiller Regional Representative

Zimbabwe, APDF Harare Jamnes Hellerman Regional Manager,Malawi, Zambia, Zimbabwe

APPENDIX H

F Addresses

ALBANIA, TIRANA BOSNIA AND HERZEGOVINA, COTE D'IVOIRE, ABIDJAN GHANA, ACCRADeshmoret e 4 Shkurtit, BANJA LUKA Corner of Booker Washington 150A Roman RoadNo. 34 Mese Selimovic 33 & Jacques Aka Cocody Streets Roman Ridge 117Tirana, Albania Banja Luka 78000, Republika Srpska 01 B.P. 1850 Accra, GhanaTelephone: (355-42) 30-017 Telephone: (387-78) 218-579 Abidjan-01, C6te d'lvoire Telephone: (233-21) 77-6245/8109Facsimile: (355-42) 40-590 Facsimile: (387-78) 218-680 Telephone: (225) 44-3244/6550 Facsimile: (233-21) 77-4961

Facsimile: (225) 44-4483ARGENTINA, BUENOS AIRES BOSNIA AND HERZEGOVINA, GUATEMALA, GUATEMALA CITYBouchard 547, 3rd Floor SARAJEVO CROATIA, ZAGREB 13 Calle 3-401106 Buenos Aires, Argentina H. Kresevljakovica 19 Kennedyev trg 6B Zona 10Telephone: (54-11) 4315-1666 71000 Sarajevo Zagreb 10000, Croatia Edificio Atlantis 14 NivelFacsimile: (54-11) 4312-7184 Bosnia and Herzegovina Telephone: (385-1) 238-7236 Guatemala City 01010, Guatemala

Telephone: (387-7) 144-0293 Facsimile: (385-1) 238-7233 Telephone: (502) 367-2275ARMENIA, YEREVAN Facsimile: (387-7) 144-0108 Facsimile: (502) 366-9851Republic Square CZECH REPUBLIC, PRAGUE2 Khorhertaranit Street BRAZIL, FORTALEZA - CEARA Husova 5 HUNGARY, BUDAPESTYerevan 10, Armenia Rua Oswaldo Cruz, No. 1, 110 00 Prague 1, Czech Republic Daewoo Bank Building, 5th FloorTelephone: (374-2) 52-4884/15-1883 Room 1810 Telephone: (420-2) 2440-1402 Bajcsy-Zsilinszky utca, 42-46Facsimile: (374-2) 15-1787 CEP-60125-150 Facsimile: (420-2) 2440-1410 H-1054 Budapest, Hungary

Fortaleza - Ceard, Brazil Telephone: (36-1) 374-9590AUSTRALIA, SYDNEY (FIAS) Telephone: (55-85) 266-4020 EGYPT, CAIRO Facsimile: (36-1) 374-9597Level I , CML Bldg Facsimile: (55-85) 266-4021 World Trade Center Bldg.14 Martin Place 1191 Corniche El Nil INDIA, MUMBAISydney, NSW 2000, Australia BRAZIL, RIO DE JANEIRO Boulac 25 Maker Chambers VITelephone: (61-2) 9223-7155 Av. Rio Branco No. I Cairo, Egypt Nariman PointFacsimile: (61-2) 9223-7152 Room 1610 Telephone: (20-2) 579-9900/6565 Mumbai 400 021, India

CEP-20090-003 Facsimile: (20-2) 579-2211 Telephone: (91-22) 285-5262/63AZERBAIJAN, BAKU Rio de Janeiro, Brazil Facsimile: (91-22) 285-527291-95 Mirza Mansur Str., Telephone: (55-21) 550-8990 ESTONIA, TALLIN NIcheri Sheher Facsimile: (55-21) 550-8999 SuurAmerika I INDIA, NEW DELHIBaku 370 004, Azerbaijan 15004 Tallinn, Estonia No. 1, Panchsheel MargTelephone: (994-12) 92-1941/2807 BRAZIL, SAO PAULO Telephone: (372-2) 631-1396 ChanakyapuriFacsimile: (994-12) 92-1479 Rua Guararapes 2064 - 10 andar Facsimile: (372-6) 631-1292 New Delhi 110 021, India

Conj. 103 Telephone: (91-11) 611-1283/1306BANGLADESH, DHAKA CEP-04561-004 ETHIOPIA, ADDIS ABABA Facsimile: (91-11) 688-0103/2278c/o World Bank Sao Paulo, Brazil Africa Avenue, Bole Road3A, Paribagh Telephone: (55-11) 5505-1629 Addis Ababa, Ethiopia INDONESIA, JAKARTADhaka 1000, Bangladesh Facsimile: (55-11) 5505-3073 Telephone: (251-1) 51-4200 Jakarta Stock Exchange Bldg.Telephone: Facsimile: (251-1) 51-1441 Tower2, 13th Floor(880-2) 861-056-68/966-9301-8 BULGARIA, SOFIA JI. Jenderal Sudirman Kav. 52-53Facsimile: (880-2) 867-521 36, Dragan Tzankov Blvd. FRANCE, PARIS Jakarta 12190, Indonesia

World Trade Center/INTERPRED 66, avenue d'1ena Telephone: (62-21) 5299-3001BELARUS, MINSK 1057 Sofia, Bulgaria 75116 Paris, France Facsimile: (62-21) 5299-3002Partizansky Prospekt, 6a Telephone: (359-2) 9181-4225/4230 Telephone: (33-1) 4069-30603rd Floor Facsimile: (359-2) 971-2045 Facsimile: (33-1) 4720-7771 JAPAN, TOKYOMinsk 220033, Belarus 10th Floor, Fukoku Seimei BuildingTelephone: (375-17) 229-8166/8167 CAMEROON, DOUALA GEORGIA, TBILISI 2-2-2, Uchisaiwai-choFacsimile: (375-17) 222-7440 96 Rue Flatters, Suite 305 c/o World Bank Chiyoda-ku

B.P. 4616 18a Chonkadze Street Tokyo 100-0011, JapanBOLIVIA, LA PAZ Douala, Cameroon Tbilisi, Georgia 380005 Telephone: (81-3) 3597-6657Edificio Bisa, Piso 9 Telephone: (237) 428-033/429-451 Telephone: (995-32) 99-0448 Facsimile: (81-3) 3597-6698Av. 16 de Julio 1628 Facsimile: (237) 428-014 Facsimile: (995-32) 99-9528Banco Mundial, Casilla 8692 KAZAKHSTAN, ALMATYLa Paz, Bolivia CHINA, BEIJING GERMANY, FRANKFURT 41 Kazybek-Bi StreetTelephone: (591-2) 356-844 9th Floor, Tower B Bockenheimer Landst. 65 4th LevelFacsimile: (591-2) 391-038 Fuhua Mansion D-60325 Frankfurt am Main, Almaty 480100, Kazakhstan

8 Chaoyangmen Beidajie Germany Telephone: (7-3272) 608-580Beijing 100027, PR China Telephone: (49-,9) 7434-8230 Facsimile: (7-3272) 608-581Telephone: (86-10) 6554-4191 Facsimile: (49-69) 7434-8239Facsimile: (86-10) 6554-4192

KENYA, NAIROBI NEPAL, KATHMANDU SLOVAK REPUBLIC, BRATISLAVA UNITED KINGDOM, LONDON< Hill Park Building, Upper Hill '/o World Bank Francisciho 4 4 Millbank

P.O. Box 30577 Yak & Yeti Hotel Complex 811 08, Bratislava, Slovak Republic London SWI P 3JA, U.K.Nairobi, Kenya Lal Durbar Telephone: (421-7) 5293-1681 Telephone: (44-171) 222-7711Telephone: (254-2) 260-341/720-467 GPO Box i98 Facsimile: (421-7) 325-722 Facsimile: (44-171) 976-8323Facsimile: (254-2) 260-383/717-390 Kathmandu, Nepal

Telephone: (977-1) 226793/766 SOUTH AFRICA, CAPE TOWN UZBEKISTAN, TASHKENT

II8 KOREA, SEOUL Facsimile: (977-1) 225112 1 Thibault Square, 13th Floor 43 Academician Suleimanova StreetYoungpoong Building Cape Town 8001 700 017 Tashkent, Uzbekistan11th Floor NIGERIA, LAGOS South Africa Telephone: (7-3712) 33-5002/2185Chongro-ku No. I Mekunwen Road, Ikyoi Telephone: (27-21) 418-7180 Facsimile: (7-3712) 40-6215Seoul 110-1 10, Korea P.O. Box 127, Marina Facsimile: (27-21) 418-7183Telephone: (82-2) 399-0905/0906 Lagos, Nigeria VIETNAM, HANOIFacsimile: (82-2) 399-0915 Telephone: (234-1) 269-0434/3175 SOUTH AFRICA, JOHANNESBURG Suite 707, Metropole Center

Facsimile: (234-1) 269-4700 First Floor, Oxford Gate 56 Ly Thai To StreetKYRGYZ REPUBLIC, BISHKEK Hyde Park Lane, Hyde Park Hanoi, Vietnam214 Moskovskaya Street PAKISTAN, ISLAMABAD Johannesburg 2196, South Africa Telephone: (84-4) 934-2282720010 Bishkek, Kyrgyz Republic 20 A Shahrah-e-Jamhuriat Telephone: (27-11) 325-0720/8 Facsimile: (84-4) 934-2289Telephonie: (996-312) 217-744/472 Ramna 5 (G 5/1) Facsimile: (27-11) 325-0582/1901Facsimile: (996-312) 610-356/481 Islamabad, Pakistan WEST BANK AND GAZA, AL-RAM

Telephone: (92-51) 279-631/2/3 SRI LANKA, COLOMBO P.O. Box 54842LATVIA, RIGA Facsimile: (92-51) 824-335/166 c/o World Bank Jerusalem, Israel1/4, Smilshu iela DFCC Building, Ist Floor Telephone: (972-2) 236-6517/6500LV-1050, Riga, Latvia PHILIPPINES, MANILA 73/5 Galle Road Facsimile: (972-2) 236-6543Telephone: (371-7) 820-348 1 Ith Floor, Tower One, Ayala Triangle Colombo 3, Sri LankaFacsimile: (371-7) 222-537 Ayala Avenue Telephone: (94-1) 448-070 ext. 325 ZIMBABWE, HARARE

Makati City 1200, Manila, Philippines Facsimile: (94-1) 471-536 101 Union Avenie, 7th FloorLITHUANIA, VILNIUS Telephone: (63-2) 848-7333/7334-8 Harare, Zimbabwe28 Vilniaus Street Facsimile: (63-2) 848-7339 THAILAND, BANGKOK Telephone: (263-4) 794-868/869/860Vilnius 2600, Lithuania Diethelm Tower A, 17th Floor Facsimile: (263-4) 793-805Telephone: (370-2) 226-013 POLAND, WARSAW 93/1 Wireless RoadFacsimile: (370-2) 226-829 Warsaw Financial Center Bangkok 10330, Thailand

Emilii Plater 53, 9th Floor Telephone: (66-2) 650-9253/8MACEDONIA, FYR, SKOPJE 00-113 Warsaw, Poland Facsimile: (66-2) 650-9259Leninova 34 Telephone: (48-22) 520-6100Skopje 91000, FYR Macedonia Facsimile: (48-22) 520-6101 TRINIDAD AND TOBAGO,Telephone: (389-91) 117-159 PORT OF SPAINFacsimile: (389-91) 117-627 ROMANIA, BUCHAREST The Mutual Center

Boulevard Dacia 83, Sector 2 16 Queen's Park WestMEXICO, MEXICO CITY Bucharest, Romania P.O. Box 751Montes Urales 760, 2nd Floor Telephone: (40-1) 211-2866 Port of Spain, Trinidad and TobagoColonia Lomas de Chapultepec Facsimile: (40-1) 211-3141 Telephone: (868) 628-4417Mexico D.F., 11000, Mexico Facsimile: (868) 622-1003Telephonie: (52-5) 520-6191 RUSSIAN FEDERATION, MOSCOWFacsimile: (52-5) 520-5659 2 Pushechnaya Street TURKEY, ISTANBUL

103012 Moscow, Russia Yildiz Posta Caddesi 17/5MOLDOVA, CHISINAU Telephone: 80280 Esentepe, Istanbul, Turkey76/6 Sciusev Str (7-095) 755-8818/883-7056 Telephone: (90-212) 212-6535/4513MD-2012, Chisinau, Moldova Facsimile: (7-095) 755-8296/98 Facsimile: (90-212) 212-9165Telephone: (373-2) 233-565/232-737Facsimile: (373-2) 233-908 SENEGAL, DAKAR UGANDA, KAMPALA

Immeuble S.D.I.H. I Luimumba AvenuLe

MOROCCO, CASABLANCA 3 Place de l'lndependance, 7th Floor Rwenzori House8 Kamal Mohamed Street B.P. 3296 P.O. Box 4463Casablanca 2000, Morocco Dakar, Senegal Kampala, UgandaTelephone: (212-2) 484-686 Telephone: (22-1) 822-9561/6470 Telephone:Facsimile: (212-2) 484-690 Facsimile: (22-1) 823-7993 (256-41) 230-094/236-825Email: [email protected] Facsimile: (256-41) 230-092/340-386

SINGAPOREMOZAMBIOUE, MAPUTO 10ShentonWay,#15-08 UKRAINE, KIEVAve. Kenneth Kaunda nr. 1224 MAS Building 4 Bogomoltsa Street, 5th FloorMaputo, Mozambique Singapore 079117 252024 Kiev, UkraineTelephone: (258-1) 492-841/851 Telephone: (65) 324-4825 Telephone: (38-044) 293-8374Facsimile: (258-1) 492-893 Facsimile: (65) 324-4615 Facsimile: (38-044) 490-5830

Project Development Facilities

AFRICA PROJECT DEVELOPMENT SOUTH AFRICA, JOHANNESBURG MEKONG PROJECT DEVELOPMENT SOUTH PACIFIC PROJECTFACILITY (APDF) Ground Floor, Victoria Gate West FACILITY (MPDF) FACILITY (SPPF)

Hyde Park Lane, Hyde Park

CAMEROON, DOUALA Johannesburg 2196, South Africa CAMBODIA, PHNOM PENH AUSTRALIA, SYDNEY96 Rue Flatters Telephone: (27-11) 325-0720 c/o UNDP Service Center Level 18, CML BuildingP.O. Box 4616 Facsimile: (27-11) 325-0729/0393 164 Pasteur Street 14 Martin PlaceDouala, Cameroon P.O. Box 877 Sydney, NSW 2000, AustialiaTelephone: (237) 428-033 ZIMBABWE, HARARE Phnom Penh, Cambodia Telephone: (61-2) 9223-7773Facsimile: (237;428-014 68-70 Union Avenue Telephone: (855-23) 720-164 Facsimile: (61-2) 9223-2533

P.O. Box UA 400 Facsimile: (855-23) 720-146

C6TE D'IVOIRE, ABIDJAN Harare, ZimbabweImmeuble CCIA, 17th Floor Telephone: (263-4) 705-286/684/229 LAO PDR, VIENTIANE01 B.P. 8669 Facsimile: (263-4) 730-959 Novotel Hotel, Suite 141, Unit 9Abidjan-01, Cote d'lvoire Samsenthai RoadTelephone: (225) 21-9697/2303 P.O. Box 585Facsimile: (225) 21-6151 Vientiane, Lao PDR

CARIBBEAN AND CENTRAL Telephone: (856-21) 219-099GHANA, ACCRA AMERICA BUSINESS ADVISORY Facsimile: (856-21) 219-098150A Roman Road SERVICE (BAS)Roman Ridge VIETNAM, HANOIAccra, Ghana TRINIDAD AND TOBAGO, Suite 706, Metropole CenterTelephone: (233-21) 77-6245/8109 PORT OF SPAIN 56 Ly Thai To StreetFacsimile: (233-21) 77-4961 Enterprise Development Limited Hanoi, Vietnam

The Mutual Center Telephone: (84-4) 824-7892KENYA, NAIROBI 16 Queen's Park West, NW Facsimile: (84-4) 824-7898International House, 6th Floor PenthouseMamaNgina Street P.O. Box 751 VIETNAM, HO CHI MINH CITYP.O. Box 46534 Port of Spain, Trinidad and Tobago Unit 3B, Regency Chancellor CourtNairobi, Kenya Telephone: (868) 628-5074 21-23 Nguyen Thi Minh Khai Str.Telephone: (254-2) 219-147/217- Facsimile: (868) 622-1003 District 1368/69/70 Ho Chi Minh City, VietnamFacsimile: (254-2) 339-121/330-436 Telephone: (84-8) 823-5266

Facsimile: (84-8) 823-5271

APPENDIX I

Countries and Regions of IFC's "Extending the Reach" Enitiative

SUB-SAHARAN AFRICA ASIA AND THE PACIFIC EUROPE LATIN AMERICA AND THECentral Africa (Central African Cambodia and Lao People's Albania CARIBBEAN

Republic, Chad, Republic Democratic Republic Armenia* and Georgia* Dominican Republic* and Haiti*of Congo, Equatorial Guinea, Maldives* and Nepal* Azerbaijan El Salvador and Nicaragua*and Gabon) Mongolia Bosnia and Herzegovina Guyana and the Eastern Caribbean

Eritrea and Ethiopia Former Yugoslav Republic of (Antigua and Barbuda,Southern Africa (Angola*, CENTRAL ASIA, THE MIDDLE EAST, Macedonia Dominica, Grenada, St. Kitts and

Mozambique, and Namibia*) AND NORTH AFRICA Slovak Republic Nevis, and St. Lucia)West Africa (Cape Verde, The Kazakhstan and Kyrgyz Republic*

Gambia, Guinea, Guinea-Bissau, Tajikistan*, Turkmenistan*, andMali, Mauritania, and Senegal) Uzbekistan

West Bank and Gaza

^ New countries added in FY99

ACRONYMS, NOTES, AND DEFINITIONS

ADB Asian Development Bank IDA International DeveLopment Association

120 AEF Africa Enterprise Fund IFC InternationaL Finance CorporationAfDB African DeveLopment Bank IFCG IFC GLobaL indexesAIF African Infrastructure Fund IFCI IFC InvestabLe indexesAMSCO African Management Services Company IMF InternationaL Monetary FundAOF Asia Opportunity Fund IPO initial pubLic offeringAPDF Africa Project DeveLopment FaciLity LAC Latin American and the CaribbeanASEAN Association of Southeast Asian Nations LIBOR London interbank offered rateBOT BuiLd-Operate-Transfer MIGA MuLtilateraL Investment Guarantee AgencyBOOT Build-Own-Operate-Transfer MPDF Mekong Project DeveLopment FacilityCAMENA Central Asia, the Middle East, and North Africa NGO nongovernmental organizationCFA African FinanciaL Community OECD Organization for Economic Cooperation andCLF Caribbean Loan FaciLity DeveLopmentEBRD European Bank for Reconstruction CEG Operations EvaLuation Group

and DeveLopment PIIF Pacific Island Investment FacilityEMDB Emerging Markets Data Base SADC Southern African DeveLopment CommunityESSA Enterprise Support Services for Africa SCI speciaL capital increaseEPU Environmental Projects Unit SEF Small Enterprise FundFDI foreign direct investment SME smalL and medium enterpriseFIAS Foreign Investment Advisory Service SOE state-owned enterpriseGCI generaL capitaL increase SPPF South Pacific Project FaciLityGDP gross domestic product TATF TechnicaL Assistance Trust FundsGDR globaL depositary receipt UEMOA West African Economic and Monetary UnionGEF Global Environment FaciLity UNDP United Nations DeveLopment ProgrammeGNP gross nationaL product USAID United States Agency for InternationaLIBRD International Bank for Reconstruction DeveLopment

and DeveLopment WTO WorLd Trade Organization

bMotes n e nzXn

I. IFC's fiscal year runs from July I to June 30. Thus, FY99 began 6. In the Project Approvals tables, the "IFC Other" column containson July 1, 1998, and ended on June 30, 1999. guarantees and risk management transactions.

2. The World Bank includes both IBRD and IDA. The World Bank 7. A single loan agreement between IFC and the borrower normallyGroup includes IBRD, IDA, IFC, and MIGA. stipulates the full amount of finance to be provided by IFC and the

3. Investment amounts are given in U.S. dollars, regardless of the participating institutions. The IFC loan is typically in two portions:currencies of the investment. Approved investment amounts in The A-loan is IFC's own portion, funded with IFC's own resourcesnon-U.S.-dollar currencies are revalued on the ending day of the and subject to its agreed loan terms.month in which they are approved. The B-loan is funded by participants on terms that may differ

4. Figures cited in connection with project financing may refer from those of IFC.to the following: 8. On-lending: The process of lending through intermediaries, such

Approvals-Loans, syndicated loans, guarantees, equity as local banks, funds raised from the Corporation's own sources.and quasi-equity investments, and underwriting approved 9. Quasi-equity instruments incorporate both loan and equityby the Board of Directors during FY99. features, which are designed to provide varying degrees of risk/

Commitments-Investments for which agreements were signed return trade-offs that lie between those of straight loan and equityby IFC during FY99. Tables referencing commitments reflect investments.FY97-FY99 non-U.S. dollar commitments revalued at the time IO. IFC and participants fully share the commercial credit risks ofof commitment. FY95 and FY96 non-U.S. dollar commitments projects, but, because IFC is the Lender of Record, participantswere revalued using the June 30th exchange rate for that year. receive the same tax and country risk benefits that IFC derives

Disbursements-Investments actually paid out during FY99. from its special status as a multilateral development agency

5. In some tables, totals may differ from the sum of individual figuresbecause of rounding.

PROJECT MANAGER AND EDITOR TRANSLATION AND PROOFINGSally Gelston Chinese: China Financial and Economic

CHIEF OF PUBLICATIONS Publishing, BeijingDana Lane French and Spanish: World Bank Translation

Division (GSDTR), Washington, DCPUBLICATIONS STAFF CONTRIBUTORSChitra Atwis, Rob Wrght ENGLISH PROOFINT

Stantey ThawteyPRIMARY IFC STAFF CONTRIBUTORSAnthony Aylward, Paut Bravery, Eric Crabtree, DSGCevdet Denizer, Kutlay Ebiri, James Emery, Grafik Communications, Ltd., Alexandria, VirginiaCaroline Goldie, Kelly Johnson, Rana Karadsheh, ILLUSTRATIONMonika Lazaro, Carol F. Lee, Toshlya Masuoka, James SteinbergJudith Apiyo Omrbura, Lory Camba Opem,Nicholas Pardoe, Feresteh Raissian, Nadir Rehman, PORTRAIT PHOTOGRAPHEREllen Schwab, Bernard Sheahan, John- J. Soladay, Breton LittlehalesStoyan Tenev, Jenifer Wishatt, Jan Peter Wogart

STAFF ASSISTANT PITINGMary Mbanefo Cadmus Graphic.SoWtons, SandAon, Vionfa

OIFCINTERNATIONAL FINANCE CORPORATION2121 PennsyLvania Avenue, NWWashington, DC 20433 USATeLephone 202-473-7711Facsimile 202-974-4384www.ifc.org

11 lll*: ll